Covivio SA's Dividend Analysis

GuruFocus Research

Fri, Apr 19, 2024, 5:04 AM 3 min read

Investigating the Upcoming Dividend and Financial Health of Covivio SA (GSEFF)

Covivio SA (GSEFF) recently announced a dividend of $3.3 per share, payable on 2024-05-27, with the ex-dividend date set for 2024-04-19. 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 Covivio SA's dividend performance and assess its sustainability.

What Does Covivio SA Do?

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Covivio SA is a French real estate investment trust involved in the ownership of properties mainly in France, Italy, and Germany. The majority of the properties in the company's real estate portfolio are office buildings located in Paris and Milan. German residential properties also represent a significant percentage of its total assets. The company derives nearly all of its revenue in the form of rental income from the ownership and maintenance of its portfolio of properties. French offices generate the majority of revenue for the company, while Italian office buildings and German residential buildings in Berlin, Hamburg, and Dresden also contribute sizable income streams.

A Glimpse at Covivio SA's Dividend History

Covivio SA has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Covivio SA's Dividend Yield and Growth

As of today, Covivio SA currently has a 12-month trailing dividend yield of 7.96% and a 12-month forward dividend yield of 7.06%. This suggests an expectation of decreased dividend payments over the next 12 months.

Over the past three years, Covivio SA's annual dividend growth rate was -7.90%. Extended to a five-year horizon, this rate increased to -5.10% per year. And over the past decade, Covivio SA's annual dividends per share growth rate stands at 0.80%.

Based on Covivio SA's dividend yield and five-year growth rate, the 5-year yield on cost of Covivio SA stock as of today is approximately 6.13%.

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 2023-12-31, Covivio SA's dividend payout ratio is 0.00.

Covivio SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Covivio SA's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. Covivio SA'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 Covivio SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Covivio SA's revenue has increased by approximately 1.20% per year on average, a rate that underperforms approximately 61.58% of global competitors.

Next Steps

In conclusion, Covivio SA's upcoming dividend payment is part of a long history of returning value to shareholders. While the dividend growth rate suggests a cautious approach to future increases, the company's profitability and growth metrics provide a solid foundation for continued dividend payments. Investors should weigh the high yield against the potential for decreased payments and consider the overall financial health and growth prospects of Covivio SA. With these factors in mind, value investors can make informed decisions on whether Covivio SA fits within their investment goals. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

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