Ventas Inc's Dividend Analysis
Assessing the Future of Ventas Inc's Dividend Payments
Ventas Inc (NYSE:VTR) recently announced a dividend of $0.45 per share, payable on 2024-01-18, with the ex-dividend date set for 2023-12-29. 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 look 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 3.55% and a 12-month forward dividend yield of 3.55%. This suggests an expectation of the 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 1.78%.
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 2023-09-30, Ventas Inc's dividend payout ratio is 90.00, which 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 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the 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 approximately 60.31% of global competitors.
Engaging Conclusion: Ventas Inc's Dividend Outlook
For value investors, Ventas Inc's dividend payments, growth rate, and payout ratio are crucial factors for assessment. While the company's dividend yield is attractive, the negative growth rate and high payout ratio may raise concerns about the sustainability of future dividends. However, Ventas Inc's solid profitability and growth metrics may provide some reassurance. Investors should weigh these aspects and consider the company's overall financial health and market conditions when making investment decisions. Could Ventas Inc's dividend be a safe bet for long-term income, or are there warning signs that investors should heed?
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
