Exploring the sustainability and growth of REXR's dividends
Rexford Industrial Realty Inc (REXR, Financial) recently announced a dividend of $0.38 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-09-28. As investors eagerly anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, we delve into Rexford Industrial Realty Inc's dividend performance and evaluate its sustainability.
Understanding Rexford Industrial Realty Inc's Operations
Rexford Industrial Realty Inc is a real estate investment trust primarily focused on the acquisition, ownership, and operation of industrial properties in Southern California. The company leases facilities in infill markets or affluent urban areas with limited developable land. The majority of Rexford's real estate portfolio, in terms of square footage, revenue generation, and total value, comprises light manufacturing and distribution warehouse buildings located in Los Angeles and San Diego. Its largest tenants hail from the wholesale and retail, light manufacturing, industrial equipment, and food and beverage industries.
Reviewing Rexford Industrial Realty Inc's Dividend History
Since 2013, Rexford Industrial Realty Inc has maintained a consistent dividend payment record, typically distributing dividends on a quarterly basis. Below is a chart depicting annual Dividends Per Share for historical trend analysis.
Dissecting Rexford Industrial Realty Inc's Dividend Yield and Growth
Rexford Industrial Realty Inc currently boasts a 12-month trailing dividend yield of 2.81% and a 12-month forward dividend yield of 3.08%, suggesting an anticipated increase in dividend payments over the next 12 months.
Over the past three years, Rexford Industrial Realty Inc's annual dividend growth rate was 19.40%. However, when extended to a five-year horizon, this rate decreased to 16.20% per year. Based on Rexford Industrial Realty Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Rexford Industrial Realty Inc stock as of today is approximately 5.95%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The dividend payout ratio offers insights into the portion of earnings Rexford Industrial Realty Inc 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, Rexford Industrial Realty Inc's dividend payout ratio is 1.42, which may suggest that the company's dividend may not be sustainable.
Furthermore, Rexford Industrial Realty Inc's profitability rank of 8 out of 10 as of 2023-06-30 indicates good profitability prospects. The company has reported net profit in 9 out of the past 10 years.
Future Outlook: Growth Metrics
Rexford Industrial Realty Inc's growth rank of 8 out of 10 suggests a strong growth trajectory relative to its competitors. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a robust revenue model. Rexford Industrial Realty Inc's revenue has increased by approximately 13.80% per year on average, outperforming approximately 88.52% of global competitors.
The company's 3-year EPS growth rate of 25.10% per year on average outperforms approximately 75.46% of global competitors, showcasing its capability to grow its earnings, a critical component for sustaining dividends in the long run. Additionally, the company's 5-year EBITDA growth rate of 16.50% outperforms approximately 76.47% of global competitors.
Conclusion
In conclusion, Rexford Industrial Realty Inc's consistent dividend payments, impressive growth rate, and solid profitability make it a compelling choice for dividend-focused investors. However, its high payout ratio may raise concerns about the sustainability of its dividends. Therefore, investors should closely monitor the company's earnings and growth metrics to make informed decisions. Remember, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
