Q: According to your company statistics page, CAR’s 3 and 5 year dividend growth rate was -100 and -66 respectively. Does that mean they significantly cut their dividend at some point in the last 3 years and, if so, was there a particular catalyst that drove them to do that? Assuming I am reading the information on the statistics correctly, what are your thoughts on the reliability of CAR’s dividend in the medium term? Contrarily, how likely is it that the dividend growth rate will accelerate once interest rates start to fall, say to catch the company up to where the dividend per unit was before the cut?
5i Research Answer:
Our company data comes from a third party and this is an error. CAR kept paying its distribution right through the covid pandemic, and raised it slightly in August 2021. It has not had a significant cut in twenty years (there was some slight variability near year ends in the early 2000s, but we think this was due to special year end dividends. Though on Bloomberg they have not been shown as special dividends during this period). Payout ratio is very conservative at 62.5% and we do not think the distribution is at any risk. This also does leave room for some further (small) increases. Generally there is not a lot of growth here, but lower rates should get investors more interested in the sector as a whole.