Unpacking the Fund's Dividend Performance and Sustainability
Principal Real Estate Income Fund (PGZ, Financial) recently announced a dividend of $0.11 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-14. 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 delve into Principal Real Estate Income Fund's dividend performance and assess its sustainability.
What Does Principal Real Estate Income Fund Do?
Principal Real Estate Income Fund is a non-diversified, closed-end management investment company. Its investment objective is to provide high current income with capital appreciation by investing in commercial real estate-related securities.
A Glimpse at Principal Real Estate Income Fund's Dividend History
Principal Real Estate Income Fund has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Principal Real Estate Income Fund's Dividend Yield and Growth
As of today, Principal Real Estate Income Fund currently has a 12-month trailing dividend yield of 14.12% and a 12-month forward dividend yield of 14.12%. This suggests an expectation of same dividend payments over the next 12 months.
Principal Real Estate Income Fund's dividend yield of 14.12% is near a 10-year high and outperforms than 93.36 of global competitors in the Asset Management industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Principal Real Estate Income Fund's annual dividend growth rate was -2.90%. Extended to a five-year horizon, this rate decreased to -6.90% per year.
Based on Principal Real Estate Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Principal Real Estate Income Fund stock as of today is approximately 9.88%.
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 2023-04-30, Principal Real Estate Income Fund's dividend payout ratio is 0.00.
Principal Real Estate Income Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Principal Real Estate Income Fund's profitability 2 out of 10 as of 2023-04-30, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Principal Real Estate Income Fund's growth rank of 2 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Conclusion
While Principal Real Estate Income Fund offers an attractive dividend yield, the sustainability of its dividends is questionable considering the company's low profitability and growth ranks, and a payout ratio of 0.00. Investors should be cautious and consider these factors before making investment decisions.
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.
