Assessing the Sustainability of KRG's Dividend Payments
Kite Realty Group Trust (KRG, Financial) recently announced a dividend of $0.24 per share, payable on 2023-10-13, with the ex-dividend date set for 2023-10-05. 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 Kite Realty Group Trust's dividend performance and assess its sustainability.
About Kite Realty Group Trust
Kite Realty Group Trust owns mainly community shopping centers concentrated in Indiana (39% of base rent), Florida (10.9%), Maryland (6.8%), New York (6%), North Carolina (5.4%) and Texas (25.7%). At year-end 2022, Kite owned interests in 183 retail operating properties and three commercial properties, representing 8.9 million of gross leasable area. It also had eight properties under development or redevelopment.
Exploring Kite Realty Group Trust's Dividend History
Kite Realty Group Trust has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Understanding Kite Realty Group Trust's Dividend Yield and Growth
As of today, Kite Realty Group Trust currently has a 12-month trailing dividend yield of 4.55% and a 12-month forward dividend yield of 4.65%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Kite Realty Group Trust's annual dividend growth rate was -11.80%. Extended to a five-year horizon, this rate increased to -11.20% per year. And over the past decade, Kite Realty Group Trust's annual dividends per share growth rate stands at -2.60%.
Based on Kite Realty Group Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Kite Realty Group Trust stock as of today is approximately 2.51%.
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, Kite Realty Group Trust's dividend payout ratio is 7.23. This may suggest that the company's dividend may not be sustainable.
Kite Realty Group Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Kite Realty Group Trust's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 3 years out of past 10 years.
Looking at Growth Metrics for Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Kite Realty Group Trust's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Kite Realty Group Trust's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Kite Realty Group Trust's revenue has increased by approximately -0.80% per year on average, a rate that underperforms than approximately 61.39% 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, Kite Realty Group Trust's earnings increased by approximately -81.70% per year on average, a rate that underperforms than approximately 98.76% of global competitors.
Conclusion
In conclusion, while Kite Realty Group Trust has a consistent dividend payment record and a fair profitability rank, its negative dividend growth rate and high payout ratio raise concerns about the sustainability of its dividends. The company's growth metrics also suggest a need for improvement. Therefore, investors should monitor these factors closely while considering Kite Realty Group Trust for their portfolio.
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