An in-depth analysis of the real estate giant's dividend history, yield, and sustainability
Simon Property Group Inc (SPG, Financial) recently announced a dividend of $1.9 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-07. 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 Simon Property Group Inc's dividend performance and assess its sustainability.
Understanding Simon Property Group Inc's Business
Simon Property Group Inc is the second-largest real estate investment trust in the United States. Its portfolio includes an interest in 230 properties: 136 traditional malls, 69 premium outlets, 14 Mills centers (a combination of a traditional mall, outlet center, and big-box retailers), 6 lifestyle centers, and 5 other retail properties. Simon's portfolio averaged $693 in sales per square foot over the 12 months prior to the pandemic. The company also owns a 21% interest in Klepierre, a European retail company with investments in shopping centers in 16 countries, and joint venture interests in 33 premium outlets across 11 countries.
A Look at Simon Property Group Inc's Dividend History
Simon Property Group Inc has maintained a consistent dividend payment record since 1994. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Deciphering Simon Property Group Inc's Dividend Yield and Growth
As of today, Simon Property Group Inc currently has a 12-month trailing dividend yield of 6.18% and a 12-month forward dividend yield of 6.54%. This suggests an expectation of increasing dividend payments over the next 12 months.
Over the past three years, Simon Property Group Inc's annual dividend growth rate was -6.00%. Extended to a five-year horizon, this rate increased to -2.90% per year. And over the past decade, Simon Property Group Inc's annual dividends per share growth rate stands at 4.50%.
Based on Simon Property Group Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Simon Property Group Inc stock as of today is approximately 5.33%.
Evaluating Simon Property Group Inc's Dividend Sustainability
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, Simon Property Group Inc's dividend payout ratio is 1.09, which may suggest that the company's dividend may not be sustainable.
Simon Property Group Inc's profitability rank is 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Assessing Simon Property Group Inc's Growth Metrics
Simon Property Group Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Simon Property Group Inc's revenue has increased by approximately -4.80% per year on average, a rate that underperforms approximately 74.88% of global competitors. Furthermore, during the past three years, Simon Property Group Inc's earnings increased by approximately -1.40% per year on average, a rate that underperforms approximately 58.76% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -2.40% underperforms approximately 71.28% of global competitors.
Concluding Thoughts
While Simon Property Group Inc has a commendable track record of consistent dividend payments, the sustainability of these dividends may be in question due to the high payout ratio. However, the company's profitability rank and growth metrics suggest a positive outlook. It's crucial for investors to monitor these metrics and the company's future performance to make informed investment decisions.
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