February 08, 2026 a 12:46 pm
AVB: Dividend Analysis - AvalonBay Communities, Inc.
AvalonBay Communities, Inc. presents an intriguing proposition for dividend-seeking investors. With a dividend yield of 4.04%, solid growth history, and over three decades of dividend payments, its profile resonates with stability and consistency. However, the high payout ratio could signal potential sustainability challenges. Investors should evaluate AvalonBay's ability to maintain its yielding prowess amidst its financial dynamics.
📊 Overview
The following table outlines the core dividend metrics for AvalonBay Communities, Inc., highlighting its sector position and dividend characteristics.
| Metric | Value |
|---|---|
| Sector | Real Estate |
| Dividend Yield | 4.04% |
| Current Dividend Per Share | 6.77 USD |
| Dividend History | 33 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
AvalonBay Communities, Inc.'s diligent dividend practices are evident in its long-standing dividend history, underscoring its commitment to shareholders.
Below is the record of recent dividend payments:
| Year | Dividend Per Share (USD) |
|---|---|
| 2026 | 1.78 |
| 2025 | 7.00 |
| 2024 | 6.80 |
| 2023 | 6.60 |
| 2022 | 6.36 |
📈 Dividend Growth
The growth rates of dividends highlight the company's ability to enhance shareholder returns over time. Consistent growth fosters predictability in payout streams.
| Time | Growth |
|---|---|
| 3 years | 3.25% |
| 5 years | 1.94% |
The average dividend growth is 1.94% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio is crucial in assessing the sustainability of a company's dividend payments. A moderate payout indicates efficient income redistribution to shareholders while retaining earnings for growth.
| Key Figure | Ratio |
|---|---|
| EPS-based | 82.52% |
| Free cash flow-based | 62.18% |
The payout ratios reflect a high distribution percentage, particularly based on EPS at 82.52%. While reflecting strong shareholder returns, this level could pressure future dividends if earnings falter.
🧮 Cashflow & Capital Efficiency
Cash flow dynamics assess operational strength and capital efficiency. A reliable cash flow contrasted with capital expenditure signals healthy financial hygiene.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.51% | 5.15% | 5.53% |
| Earnings Yield | 3.46% | 3.51% | 5.04% |
| CAPEX to Operating Cash Flow | 12.32% | 12.65% | 12.29% |
| Stock-based Compensation to Revenue | 0.87% | 0.98% | 1.31% |
| Free Cash Flow / Operating Cash Flow Ratio | 87.68% | 87.35% | 87.71% |
AvalonBay displays robust cash flow management, with substantial free cash flow yield maintained over the years, ensuring adequate dividend coverage and financial flexibility.
🛡️ Balance Sheet & Leverage Analysis
The balance sheet's robustness is pivotal in determining financial stability. Low leverage and strong liquidity underline a firm's solvency.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.69 | 0.69 | 0.75 |
| Debt-to-Assets | 0.39 | 0.39 | 0.41 |
| Debt-to-Capital | 0.41 | 0.41 | 0.43 |
| Net Debt to EBITDA | 3.78 | 3.94 | 3.58 |
| Current Ratio | 0.36 | 0.76 | 1.11 |
| Quick Ratio | 0.36 | 0.76 | 1.11 |
AvalonBay's leverage metrics indicate balanced debt management; however, the marginally low current and quick ratios could suggest tighter liquidity in recent years.
💪 Fundamental Strength & Profitability
Strong fundamentals and profitability illustrate a company's ability to generate earnings. It's key for dividend viability and growth.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 9.06% | 7.88% | 10.10% |
| Return on Assets | 5.15% | 4.49% | 5.56% |
| Net Margin | 37.13% | 33.56% | 43.83% |
| EBIT Margin | 44.93% | 41.35% | 53.26% |
| EBITDA Margin | 73.99% | 70.87% | 84.68% |
| Gross Margin | 63.16% | 64.30% | 64.56% |
AvalonBay exhibits strong margins and returns, though there's a noted decline in 2023, affecting profitability positions. Consistency in these metrics is crucial for future dividend safety.
💹 Price Development
⚖️ Dividend Scoring System
| Criterion | Score | Rating |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 2 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Overall Score: 29/40
🛍️ Rating
Overall, AvalonBay Communities, Inc. stands as a solid dividend investment choice with a mix of stability and growth potential. Its long history of dividends and solid yield appeal to income investors, though the high payout ratio warrants caution. Further investor consideration should focus on management's strategy to sustain dividends amid evolving financial frameworks.