In This Article:
Unveiling the Dividend Profile of AvalonBay Communities Inc
AvalonBay Communities Inc (NYSE:AVB) recently announced a dividend of $1.65 per share, payable on January 16, 2024, with the ex-dividend date set for December 28, 2023. 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 AvalonBay Communities Inc's dividend performance and assess its sustainability.
What Does AvalonBay Communities Inc Do?
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AvalonBay Communities owns a portfolio of 276 apartment communities with over 82,000 units and is developing 18 additional properties with over 5,700 units. The company focuses on owning large, high-quality properties in major metropolitan areas of New England, New York/New Jersey, Washington D.C., California, and the Pacific Northwest.
A Glimpse at AvalonBay Communities Inc's Dividend History
AvalonBay Communities Inc has maintained a consistent dividend payment record since 1994. Dividends are currently distributed on a quarterly basis.
AvalonBay Communities Inc has increased its dividend each year since 1994. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 29 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down AvalonBay Communities Inc's Dividend Yield and Growth
As of today, AvalonBay Communities Inc currently has a 12-month trailing dividend yield of 3.49% and a 12-month forward dividend yield of 3.52%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, AvalonBay Communities Inc's annual dividend growth rate was 1.50%. Extended to a five-year horizon, this rate increased to 2.50% per year. And over the past decade, AvalonBay Communities Inc's annual dividends per share growth rate stands at 5.10%.
Based on AvalonBay Communities Inc's dividend yield and five-year growth rate, the 5-year yield on cost of AvalonBay Communities Inc stock as of today is approximately 3.95%.
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 September 30, 2023, AvalonBay Communities Inc's dividend payout ratio is 0.99, which may suggest that the company's dividend may not be sustainable.