Deep Dive into the Dividend Performance and Sustainability of Sumitomo Realty & Development Co Ltd
Sumitomo Realty & Development Co Ltd (SURDF, Financial) recently announced a dividend of $29 per share, payable on 0000-00-00, with the ex-dividend date set for 2023-09-28. 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 Sumitomo Realty & Development Co Ltd's dividend performance and assess its sustainability.
Company Overview: Sumitomo Realty & Development Co Ltd
Sumitomo Realty & Development is one of the three big Japanese real estate companies. Unlike Mitsubishi Estate in Marunouchi or Mitsui Fudosan in Nihonbashi, it did not inherit a cluster of prime properties from its prewar predecessor, so Sumitomo Realty has built up a portfolio dispersed across central Tokyo (not just in the main business districts) by opportunistically redeveloping plots of land acquired piecemeal. After office leasing, condo development is a relatively important business for Sumitomo Realty, contributing close to one fourth of its operating profit. The firm is slightly smaller than Mitsubishi Estate and Mitsui Fudosan by assets and has more financial leverage than they do.
Dividend History of Sumitomo Realty & Development Co Ltd
Sumitomo Realty & Development Co Ltd has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth of Sumitomo Realty & Development Co Ltd
As of today, Sumitomo Realty & Development Co Ltd currently has a 12-month trailing dividend yield of 1.54% and a 12-month forward dividend yield of 1.83%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Sumitomo Realty & Development Co Ltd's annual dividend growth rate was 14.10%. Extended to a five-year horizon, this rate decreased to 14.00% per year. And over the past decade, Sumitomo Realty & Development Co Ltd's annual dividends per share growth rate stands at an impressive 10.50%.
Based on Sumitomo Realty & Development Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Sumitomo Realty & Development Co Ltd stock as of today is approximately 2.97%.
Assessing Dividend Sustainability: 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 2023-06-30, Sumitomo Realty & Development Co Ltd's dividend payout ratio is 0.15.
Sumitomo Realty & Development Co Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sumitomo Realty & Development Co Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. Sumitomo Realty & Development Co Ltd'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 Sumitomo Realty & Development Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sumitomo Realty & Development Co Ltd's revenue has increased by approximately -2.50% per year on average, a rate that underperforms than approximately 61.55% 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, Sumitomo Realty & Development Co Ltd's earnings increased by approximately 4.70% per year on average, a rate that underperforms than approximately 46.9% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.70%, which underperforms than approximately 44.82% of global competitors.
Conclusion
In conclusion, Sumitomo Realty & Development Co Ltd's consistent dividend payments, impressive growth rates, and low payout ratio indicate a sustainable dividend policy. Despite underperforming some global competitors in terms of revenue and earnings growth, the company's strong profitability and promising growth rank suggest a potential for future dividend increases. Investors seeking income-generating stocks should keep a close eye on Sumitomo Realty & Development Co Ltd.
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