Unveiling Ventas Inc's Dividend Performance: A Deep Dive
Exploring the Sustainability of Ventas Inc's Dividend Payments
Ventas Inc (NYSE:VTR) recently announced a dividend of $0.45 per share, payable on 2023-10-12, with the ex-dividend date set for 2023-09-29. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Ventas Inc's dividend performance and assess its sustainability.
What Does Ventas Inc Do?
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Ventas owns a diversified healthcare portfolio of nearly 1,400 in-place properties spread across the senior housing, medical office, hospital, life science, and skilled nursing/post-acute care. The portfolio includes over 40 properties in Canada and the United Kingdom as the company looks for additional investment opportunities in countries with mature healthcare systems that operate similarly to the United States. The firm also owns mortgages and other loans, contributing about 3% of net operating income.
A Glimpse at Ventas Inc's Dividend History
Ventas Inc has maintained a consistent dividend payment record since 1999. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Ventas Inc's Dividend Yield and Growth
As of today, Ventas Inc currently has a 12-month trailing dividend yield of 4.31% and a 12-month forward dividend yield of 4.31%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Ventas Inc's annual dividend growth rate was -17.20%. Extended to a five-year horizon, this rate increased to -12.90% per year. And over the past decade, Ventas Inc's annual dividends per share growth rate stands at -3.70%.
Based on Ventas Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Ventas Inc stock as of today is approximately 2.16%.
The Sustainability Question: Payout Ratio and Profitability
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, Ventas Inc's dividend payout ratio is 8.18. And this may suggest that the company's dividend may not be sustainable.
Ventas Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Ventas Inc's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Ventas Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Ventas Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Ventas Inc's revenue has increased by approximately -0.80% per year on average, a rate that underperforms than approximately 61.48% of global competitors.
Next Steps
In conclusion, while Ventas Inc has shown a consistent dividend payment record, its negative dividend growth rate and low payout ratio raise questions about the sustainability of future dividends. However, the company's good profitability and growth metrics offer some reassurance. Investors considering Ventas Inc should weigh these factors carefully. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
