Unveiling Sun Communities Inc's Dividend Performance: A Deep Dive
Exploring the Sustainability and Growth Prospects of Sun Communities Inc's Dividends
Sun Communities Inc(NYSE:SUI) recently announced a dividend of $0.93 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-09-28. As investors eagerly anticipate this upcoming payment, attention also turns to the company's dividend history, yield, and growth rates. Using data from GuruFocus, let's delve into Sun Communities Inc's dividend performance and evaluate its sustainability.
Introduction to Sun Communities Inc
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Sun Communities is a residential REIT that focuses on owning manufactured housing, residential vehicle communities, and marinas. The company currently owns a portfolio of 671 properties, which includes 354 manufactured housing communities, 182 residential vehicle communities, and 135 marina properties. Sun targets owning properties that are desirable as second homes or vacation properties with nearly 50% of the portfolio located in either Florida or Michigan near major bodies of water.
Exploring Sun Communities Inc's Dividend History
Sun Communities Inc has upheld a consistent dividend payment record since 1993. Dividends are currently distributed on a quarterly basis. Sun Communities Inc has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, a distinction that is awarded to companies that have increased their dividend each year for at least the past 10 years.
Understanding Sun Communities Inc's Dividend Yield and Growth
As of today, Sun Communities Inc currently has a 12-month trailing dividend yield of 3.05% and a 12-month forward dividend yield of 3.13%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Sun Communities Inc's annual dividend growth rate was 5.50%. Extended to a five-year horizon, this rate remained the same. And over the past decade, Sun Communities Inc's annual dividends per share growth rate stands at 1.60%.
Based on Sun Communities Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Sun Communities Inc stock as of today is approximately 3.99%.
Is Sun Communities Inc's Dividend Sustainable?
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Sun Communities Inc's dividend payout ratio is 1.96, which may suggest that the company's dividend may not be sustainable.
Sun Communities Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sun Communities Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Assessing Sun Communities Inc's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Sun Communities Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Sun Communities Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sun Communities Inc's revenue has increased by approximately 19.40% per year on average, a rate that outperforms than approximately 90.88% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Sun Communities Inc's earnings increased by approximately 3.60% per year on average, a rate that outperforms than approximately 51.96% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 21.60%, which outperforms than approximately 81.66% of global competitors.
Wrapping Up
While Sun Communities Inc has a commendable record of consistent and increasing dividends, its high payout ratio raises questions about the sustainability of future dividends. However, the company's strong profitability and growth metrics, including its revenue per share, 3-year revenue growth rate, and 5-year EBITDA growth rate, provide a positive outlook for the company's ability to sustain dividends in the long run. As always, investors should conduct their due diligence before making investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
