Unveiling the Dividend History, Yield, and Growth of W.P. Carey Inc
W.P. Carey Inc (WPC, Financial) recently announced a dividend of $1.07 per share, payable on October 16, 2023, with the ex-dividend date set for September 28, 2023. As investors eagerly anticipate this upcoming payment, it's essential to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, this article provides an in-depth analysis of W.P. Carey Inc's dividend performance and its sustainability.
What Does W.P. Carey Inc Do?
W.P. Carey Inc is a real estate investment trust (REIT) primarily involved in owning properties located in the U.S., Western Europe, and Northern Europe. The company organizes its operations into Real Estate and Investment Management segments. The vast majority of its income comes from lease revenue generated by its Real Estate division. W.P. Carey's real estate portfolio mainly comprises single-tenant office, industrial, warehouse, and retail facilities located worldwide, with most of its revenue generated from properties in the USA. The company's Investment Management unit offers real estate advisory and portfolio management services to other REITs.
A Glimpse at W.P. Carey Inc's Dividend History
W.P. Carey Inc has upheld a consistent dividend payment record since 1998, with dividends currently distributed on a quarterly basis. The company has increased its dividend annually since 1998, earning it the status of a dividend aristocrat. This title is conferred on companies that have consistently increased their dividend each year for at least the past 25 years.
Breaking Down W.P. Carey Inc's Dividend Yield and Growth
As of today, W.P. Carey Inc boasts a 12-month trailing dividend yield of 7.79% and a 12-month forward dividend yield of 7.83%. This implies an expected increase in dividend payments over the next 12 months.
Over the past three years, W.P. Carey Inc's annual dividend growth rate was 0.80%. Extending this to a five-year horizon, the rate increases to 1.10% per year. Over the past decade, W.P. Carey Inc's annual dividends per share growth rate stands at 3.90%.
Based on W.P. Carey Inc's dividend yield and five-year growth rate, the 5-year yield on cost of W.P. Carey Inc stock as of today is approximately 8.23%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, it's crucial 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, ensuring the availability of funds for future growth and unexpected downturns. As of June 30, 2023, W.P. Carey Inc's dividend payout ratio is 1.19, suggesting that the company's dividend may not be sustainable.
W.P. Carey Inc's profitability rank of 7 out of 10 suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
For a company to sustain its dividends, robust growth metrics are essential. W.P. Carey Inc's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors.
Revenue is the lifeblood of any company, and W.P. Carey Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. W.P. Carey Inc's revenue has increased by approximately 0.80% per year on average, a rate that underperforms approximately 51.1% 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, W.P. Carey Inc's earnings increased by approximately 18.90% per year on average, a rate that underperforms approximately 30.1% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -0.50% underperforms approximately 67.82% of global competitors.
Conclusion
While W.P. Carey Inc has an impressive dividend history, its high payout ratio raises questions about the sustainability of its dividends. Yet, the company's profitability and growth metrics suggest a promising future. Ultimately, investors must consider these factors and their individual risk tolerance before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
