Welltower Inc's Dividend Analysis
An In-depth Look at Welltower Inc's Upcoming Dividend and Its Historical Performance
Welltower Inc (NYSE:WELL) recently announced a dividend of $0.61 per share, payable on 2024-03-07, with the ex-dividend date set for 2024-02-22. 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 Welltower Inc's dividend performance and assess its sustainability.
What Does Welltower Inc Do?
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Welltower owns a diversified healthcare portfolio of over 2,000 in-place properties spread across the senior housing, medical office, and skilled nursing/post-acute care sectors. The portfolio includes over 100 properties in both Canada and the United Kingdom as the company looks for additional investment opportunities in countries with mature healthcare systems that operate similarly to that of the United States.
A Glimpse at Welltower Inc's Dividend History
Welltower Inc has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Welltower Inc's Dividend Yield and Growth
As of today, Welltower Inc currently has a 12-month trailing dividend yield of 2.64% and a 12-month forward dividend yield of 2.64%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Welltower Inc's annual dividend growth rate was -3.30%. Extended to a five-year horizon, this rate decreased to -8.10% per year. And over the past decade, Welltower Inc's annual dividends per share growth rate stands at -3.20%.
Based on Welltower Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Welltower Inc stock as of today is approximately 1.73%.
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 2023-12-31, Welltower Inc's dividend payout ratio is 3.26, which may suggest that the company's dividend may not be sustainable.
Welltower Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Welltower Inc's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of the year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Welltower 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 Welltower Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Welltower Inc's revenue has increased by approximately 5.10% per year on average, a rate that outperforms approximately 65.33% 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, Welltower Inc's earnings increased by approximately -35.60% per year on average, a rate that outperforms approximately 9.59% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -32.10%, which outperforms approximately 3.99% of global competitors.
Next Steps
In summary, while Welltower Inc's dividend history is long-standing and consistent, the recent decline in dividend growth rates and a low payout ratio raise questions about the sustainability of future dividends. However, the company exhibits a good profitability rank and has shown a robust revenue model, which are positive indicators for dividend sustainability. Investors should also consider the company's growth metrics, as they provide a window into the future prospects of Welltower Inc. With these factors in mind, value investors may want to keep a close eye on Welltower Inc's financial health and strategic initiatives to better gauge the potential for continued dividend payments.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
