Aveo Retirement Village Dividend Analysis
Added on 2020-03-16
6 Pages950 Words289 Views
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Finance
INTRODUCTIONThe current study is based on the critical evaluation of Aveo Retirement Village’s dividendhistory in past 5 years, by considering the company's dividend policy and dividend level. Onthe basis of the analysis, recommendation on preferred policy and dividend level will beprovided and an appropriate conclusion and reasoning will be briefed at the end.DIVIDEND ANALYSIS A BRIEF OF AVEO GROUP LIMITED: RETIREMENT VILLAGESAveo Group Limited is into the business of development, operation and management ofretirement communities. There are various activities the Company is involved into butprincipally top in list are investment in retirement villages and their development andmanagement; developmental activities for the purpose of used properties like resale of land aswell as residential, commercial, retail and industrial property; it also makes investment in,and does management of real estate sectors income-producing retail, commercial andindustrial property; building of commercial, industrial and residential nature and constructionfor the Company, and management of funds and asset (Annual report of Aveo Group, 2017).There are two segments through which the company operates, namely retirement and non-retirement real estate segments. Retirement segment develops and operates into retirementvillages and specific aged care facilities so as to produce rental and other income. The othernon-retirement segment develops the residential, commercial and retail property for publicand is not segment specifically. Past 5 year’s dividend history of AVEO Group LimitedTable 1: Aveo’s Dividend HistoryAveo’s DividendHistory2013(in ¢)2014(in ¢)2015(in ¢)2016(in ¢)2017(in ¢)H F Result-4589Final1----Interim-----Table 2Aveo’s Dividend YieldAveo’s Annual Dividend Yield201520162017Annual Dividend Yield (in %)1.92.53.2Aveo’s Annual Dividend ((in ¢)589
Table 3Aveo’s Return on Equity, Shareholders Return and Dividend Payout RatioAveo’s Group LimitedParticulars20132014201520162017Return on equity (in %)4.28.85.3Shareholder’s Return (in %)--27.726-9.5Payout Ratio (in %)---2950From the Table 1 given above, it is clear that Aveo Group Limited has distributed thesmall sum of dividend in a period of last 5 years but in an increasing fashion. Therefore itsdividend payout ratio is showing a rising trend from 29 to 50 in Figure 3. Also according toTable 2 given above, the Annual dividend is gradually rising in order from 5-8-9 and so is itsdividend yield. That is a very systematic and planned way a company has distributed to itsstakeholders in last few years in an increasing order satisfying the gut of an investor, whichwould mean that the company has not shown any disappointing performance. Critical evaluation of dividend history and earnings per shareAs per the statistics are given in Figure 1 and Figure 2, read with Figure 3 given above, theCompany has consistently paid rising dividend since 2013. Also, the earning on the equityhas risen from 2015. According to which it can be said that the company payout history isgrowing with payout ratio rising to nearly double from 2016. Although the shareholder'sreturn shows a negative fall in 2017 but cannot be treated as a negative feedback in entirety. Analysis of Dividend policy and recommendationsTable 4Investment AnalysisYearSecurities price at year-end (in $)Profit after tax ($m)Price-earnings ratio20131.2739.29.320142.0642.121.720152.5854.723.720163.178918.620172.78108.414.7Based on the statistics provided in the figure above, Aveo’s security prices, as well as theprofit, earned after tax is showing an ascending order. This shows that the company is in its
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