Assessing the Sustainability of Upcoming Dividends
CapitaLand India Trust (ACNDF) recently announced a dividend of $0.03 per share, payable on 2024-02-28, with the ex-dividend date set for 2024-02-20. 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 look into CapitaLand India Trust's dividend performance and assess its sustainability.
What Does CapitaLand India Trust Do?
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CapitaLand India Trust is a Singapore-listed property trust that obtains portfolio returns for unitholders by investing in information technology, or IT, parks, and office properties in major Indian cities. Group revenue is derived primarily from corporate tenants. The company focuses on the purchase and development of properties to be used primarily for business space. A-iTrust may also purchase, hold and develop land or uncompleted developments to be used for business space to hold the properties upon completion. A-iTrust is positioned to capitalize on the IT and business process management industries in India.
A Glimpse at CapitaLand India Trust's Dividend History
CapitaLand India Trust has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down CapitaLand India Trust's Dividend Yield and Growth
As of today, CapitaLand India Trust currently has a 12-month trailing dividend yield of 6.33% and a 12-month forward dividend yield of 5.41%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, CapitaLand India Trust's annual dividend growth rate was 21.00%. Extended to a five-year horizon, this rate decreased to 6.10% per year. And over the past decade, CapitaLand India Trust's annual dividends per share growth rate stands at 4.20%.
Based on CapitaLand India Trust's dividend yield and five-year growth rate, the 5-year yield on cost of CapitaLand India Trust stock as of today is approximately 8.51%.
The Sustainability Question: 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, CapitaLand India Trust's dividend payout ratio is 0.84. And this may suggest that the company's dividend may not be sustainable.