Dividend Story of 4 Real Estate Players: GMG, DXS, GPT, SCG

Real estate is a critical component of an economy as it helps create jobs, generate income for individuals, and provide an investment option whose value does not depreciate over time. Investing in real estate sector is seen as an attractive option as it offers a stable income in the form of dividends and provides the benefit of capital appreciation in the long-term. In Australia, the REIT industry has developed significantly ever since the country adopted the US REIT approach in 1971.

The real estate sector has a comparatively high correlation with factors including interest rate, income and population growth and others, thereby, making the sector volatile. Most of the players in real estate are consistent in paying a substantial dividend which is alluring to the investors. Real estate stocks act as a good portfolio diversifier as they help subside the probable losses from other riskier stocks.

Also Read: 5 Real Estate Stocks To Look At For Dividend Income - BWR, GDI, PPC, RFF, LIC

Let’s delve deeper into four real estate stocks and look at their business structure, dividend distribution pattern and corresponding stock update.

GMG delivered dividend in line with guidance

Goodman Group (ASX:GMG) is an ASX-listed industrial property group which holds, develops and manages industrial properties comprising of warehouses, logistics facilities and business parks.

Goodman delivered robust 1H FY2020 results led by an impressive demand from customers, including datacentre users and e-commerce. GMG witnessed an upsurge of 4.9 per cent in net tangible assets to $5.60 per security since June 2019 and assets under management of $49.2 billion (as at 31 December 2019).

The Company declared a dividend of 15 cps (unfranked) for the six months ended 31 December 2019. This is in line with capital management strategy and guidance. The payment date was 25 February 2020.

Also, the Company provided an upgraded forecast for FY 2020, as mentioned below:

• Operating EPS to reach 57.3 cents per share, an increase of 11 per cent compared to FY 2019.
• Full-year distribution per security per previous guidance stated at 30 cps

Dividend history with corresponding share movement

In the last four years, the annual dividend has increased at a constant rate (as mentioned in the table below).

Source: ASX

The stock’s price declined by 0.28 per cent as compared to the previous close on 11 December 2019, the release date for interim dividend. GMG delivered a positive return of 2.56 and 4.39 per cent in 6 months and YTD, respectively.

DXS showcases a consistent growth in dividend over the years

Dexus (ASX: DXS) is a real estate group with ~35 years of experience in property development, investment and asset management. DXS directly owns $16.8 billion of industrial and office properties in Australia. For third party clients, the Company handles properties worth $17.0 billion of retail, office, healthcare and industrial estate.

Transition of Australian Mandate:

Recently, Dexus updated the market that it would end its Australian Mandate’s management which comprises of the property portfolio of $1.6 billion from 30 June 2020.

DXS further mentions that this transition will have no impact on Adjusted Funds from Operations or dividend distribution in FY 2020.

Dividend update:

On 06 February 2020, DXS declared a dividend of 27 cps (unfranked) to its shareholders. This dividend is for the six months ended 31 December 2019. The payment was made on 28 February 2020 with the record date of dividend as 31 December 2019.

DXS has an annual dividend yield of 4.28 per cent. Price to earnings ratio of the stock was noted at 8.6x and earnings per share were recorded at $1.438.

Interestingly, while viewing at the Company’s dividend from 2016 to 2019, the per cent growth each year was maintained at 5 per cent.

The Company also provided the market guidance for dividend distribution growth which is expected to be maintained at around 5.5 per cent for FY 2020 ended 30 June 2020.

The stock settled at $12.88 on 6 February 2020 (the release date for dividend distribution), with a positive return of 1.39 and 4.74 per cent in the last six months and YTD, respectively.

GPT ‘s DPS is up by 4%

The GPT Group (ASX: GPT) owns diversified property groups and operates $25.3 billion worth of portfolios comprising of logistics, retail and office property assets across Australia.

In the recently released annual report for FY 2019, the Company mentioned that it has total assets under management of $25.3 billion with Weighted Average Capitalisation Rate of 4.95 per cent.

Net tangible assets per security stood at $5.8, up by 3.9 per cent. FFO growth per security and distribution growth per security is 2.6 per cent and 4 per cent, respectively.

GPT has witnessed 5-year average distribution per security growth of 4.5 per cent and distribution per security growth of 4 per cent in FY 2019. The full-year dividend distribution was 26.48 cents per stapled security as compared to 25.46 in FY 2018.

On 12 December 2019, GPT declared an interim dividend of $0.1337 per share. This dividend was released for the six months ended 31 December 2019.

As per the guidance for FY 2020, both DPS growth and FFO per security growth are projected to be 3.5 per cent. GPT Group foresees to receive a positive outcome from its recent development completions and logistics acquisitions.

The annual divided yield for GPT is 5.02 per cent.

SCG’s full-year dividend is in line with guidance

An ASX-listed property Company, Scentre Group (ASX:SCG) is the owner and operator of the prominent living centres across Australia and New Zealand. The Assets Under Management of the Company’s retail real estate was around $55.3 billion. Scentre was incorporated on 30 June 2014 with a merger of the operating platform of Australia and New Zealand arms and Westfield Retail Trust.

After the release of its financial results for the year ended 31 December 2019, the Company provided the date for the annual general meeting with shareholders. The meeting date is scheduled for 08 April 2020.

Dividend Announcement:

On 18 February 2020, the Company came out with its 12 months results for the period ended 31 December 2019 wherein, the distribution for the full year was 22.6 cents per security which are in line with its forecast. This dividend amounts to $1190.4 million for the 12 months ended 31 December 2019 as compared to $1175.4 million in the previous year.

Scentre updated the market about the interim distribution of $0.113 per fully paid ordinary shares on 07 February 2020.

SCG comes under the category of high dividend distribution stocks with an annual dividend yield of 8.37 per cent.

For the 12 months ending 31 December 2020, the forecast figure for DPS is 23.28 cps which is an increase of 3 per cent compared to pcp.

Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.