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Mid-America Apartment Communities Inc's Dividend Analysis

Assessing the Sustainability of MAA's Upcoming Dividend

Mid-America Apartment Communities Inc (NYSE:MAA) recently announced a dividend of $1.47 per share, payable on 2024-04-30, with the ex-dividend date set for 2024-04-12. 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 Mid-America Apartment Communities Inc's dividend performance and assess its sustainability.

What Does Mid-America Apartment Communities Inc Do?

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Mid-America Apartment Communities Inc, or MAA, is a real estate investment trust engaged in the acquisition, operation, and development of multifamily apartment communities located in southeastern and southwestern United States. The company operates two reportable segments; Same Store and Non-Same Store and Other. Key revenue comes from the Same Store segment, which includes communities that MAA has owned and stabilized for at least a full 12 months as of the beginning of the calendar year.

Mid-America Apartment Communities Inc's Dividend Analysis
Mid-America Apartment Communities Inc's Dividend Analysis

A Glimpse at Mid-America Apartment Communities Inc's Dividend History

Mid-America Apartment Communities Inc has maintained a consistent dividend payment record since 1994, currently distributed on a quarterly basis. The company has increased its dividend each year since then, earning the status of a dividend aristocrata prestigious recognition for companies with at least 30 consecutive years of dividend increases. Below is a chart showing the annual Dividends Per Share for tracking historical trends.

Breaking Down Mid-America Apartment Communities Inc's Dividend Yield and Growth

As of today, Mid-America Apartment Communities Inc currently has a 12-month trailing dividend yield of 4.46% and a 12-month forward dividend yield of 4.63%, indicating an expectation of increased dividend payments over the next 12 months.

Over the past three years, Mid-America Apartment Communities Inc's annual dividend growth rate was 11.90%. This rate decreased to 8.00% per year over a five-year horizon, and the annual dividends per share growth rate stands at 6.30% over the past decade. The 5-year yield on cost of Mid-America Apartment Communities Inc stock as of today is approximately 6.55%.

Mid-America Apartment Communities Inc's Dividend Analysis
Mid-America Apartment Communities Inc's Dividend Analysis

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. As of 2023-12-31, Mid-America Apartment Communities Inc's dividend payout ratio is 1.19, which may suggest that the company's dividend may not be sustainable.

Mid-America Apartment Communities Inc's profitability rank of 8 out of 10, as of 2023-12-31, suggests good profitability prospects. The company has reported positive net income annually over the past decade, further solidifying its high profitability.

Growth Metrics: The Future Outlook

Mid-America Apartment Communities Inc's growth rank of 8 out of 10 indicates a good growth trajectory relative to competitors. The company's revenue, measured by revenue per share and 3-year revenue growth rate, has increased by approximately 7.90% per year on average, outperforming approximately 67.96% of global competitors.

The 3-year EPS growth rate indicates an average annual increase of 29.30% in earnings, outperforming approximately 76.64% of global competitors. Additionally, the 5-year EBITDA growth rate of 19.60% outperforms approximately 86.44% of global competitors.

Next Steps

In conclusion, Mid-America Apartment Communities Inc's long-standing history of dividend payments, coupled with a solid growth rate, paints a positive picture for dividend investors. However, the high payout ratio may raise concerns about the dividend's sustainability unless backed by continuous strong profitability and growth metrics. Investors should consider these factors, along with the company's robust profitability and growth ranks, when evaluating the future prospects of MAA's dividends. For those seeking high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to discover potential investment opportunities.

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.