An In-Depth Look at Wharf Real Estate Investment Co Ltd’s Upcoming Dividend Payout
Wharf Real Estate Investment Co Ltd (WRFRF) recently announced a dividend of $0.61 per share, payable on 2024-04-23, with the ex-dividend date set for 2024-04-05. 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 look into Wharf Real Estate Investment Co Ltd’s dividend performance and assess its sustainability.
What Does Wharf Real Estate Investment Co Ltd Do?
Wharf Real Estate Investment Co Ltd, spun off from Wharf Holdings in November 2017, is a prominent property investor with a strategic focus on prime retail assets in Hong Kong. The company’s revenue is heavily dependent on rental income from two flagship properties, Harbour City and Times Square, which contribute to approximately 80% of its revenue. Other assets include The Murray hotel, Plaza Hollywood mall, two Central CBD offices, and properties in Singapore and Suzhou. Originally a shipping company, Wharf Real Estate Investment Co Ltd transformed into a property developer and investor in the 1960s. Its major sites, Harbour City and Times Square, were once a series of wharfs and a tram depot, respectively. Wheelock Company Limited maintains a 45% stake in Wharf Real Estate Investment Co Ltd.
A Glimpse at Wharf Real Estate Investment Co Ltd’s Dividend History
Since its inception, Wharf Real Estate Investment Co Ltd has established a commendable track record of consistent dividend payments, with distributions occurring bi-annually since 2018. To illustrate the historical trends, here is a chart depicting the annual Dividends Per Share.
Breaking Down Wharf Real Estate Investment Co Ltd’s Dividend Yield and Growth
At present, Wharf Real Estate Investment Co Ltd boasts a trailing dividend yield of 5.01% over the past 12 months and a forward dividend yield of 4.79%, indicating a slight expected decrease in dividend payments in the coming year. Over the last three years, the annual dividend growth rate has been -14.60%. Taking into account the dividend yield and the five-year growth rate, the 5-year yield on cost for Wharf Real Estate Investment Co Ltd’s stock is approximately 5.01%.
The Sustainability Question: Payout Ratio and Profitability
Evaluating the sustainability of Wharf Real Estate Investment Co Ltd’s dividends requires an examination of the company’s dividend payout ratio. As of December 31, 2023, the dividend payout ratio stood at 0.77, which may raise concerns regarding the long-term sustainability of the dividend payments. Additionally, the company’s profitability rank is currently 6 out of 10, indicating fair profitability with a history of net profit in 7 out of the past 10 years.
Growth Metrics: The Future Outlook
For dividend sustainability, growth metrics are critical. Wharf Real Estate Investment Co Ltd’s growth rank is 6 out of 10, suggesting a fair growth outlook. The company’s revenue per share and 3-year revenue growth rate demonstrate a strong revenue model, despite an average annual increase of -8.10% in revenue, which underperforms approximately 73.62% of global competitors.
Concluding Thoughts on Wharf Real Estate Investment Co Ltd’s Dividends
In conclusion, while Wharf Real Estate Investment Co Ltd has a history of consistent dividend payments, its recent dividend growth rate and payout ratio may concern investors about the sustainability of future dividends. The company’s fair profitability and growth outlook provide some reassurance, but the decline in revenue growth compared to global competitors is a point to consider. Investors seeking high-dividend yield opportunities can explore further with the High Dividend Yield Screener available to GuruFocus Premium users.
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.