July 17, 2025 a 07:47 am
MAA: Dividend Analysis - Mid-America Apartment Communities, Inc.
Mid-America Apartment Communities, Inc. (MAA) presents an intriguing dividend profile with a significant yield of 5.08%. With a steady dividend history spanning 32 years and solid growth trends, investors could expect a stable income stream. However, close attention should be paid to the payout ratios, suggesting potential areas of concern regarding earnings coverage.
📊 Overview
Mid-America Apartment Communities operates within the Real Estate sector, providing a stable and potentially lucrative diversification for income-focused portfolios.
| Metric | Value |
|---|---|
| Sector | Real Estate |
| Dividend Yield | 5.08% |
| Current Dividend per Share | 5.91 USD |
| Dividend History | 32 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The company has maintained an uninterrupted dividend payment history for over three decades, showcasing its commitment to returning capital to shareholders.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 4.545 |
| 2024 | 5.88 |
| 2023 | 5.6 |
| 2022 | 4.675 |
| 2021 | 4.10 |
📈 Dividend Growth
Recent years have seen a modest increase in growth rates, indicating the potential for long-term capital gains alongside regular income.
| Time | Growth |
|---|---|
| 3 years | 12.77% |
| 5 years | 8.89% |
The average dividend growth is 8.89% over 5 years. This shows moderate but steady dividend growth.
💸 Payout Ratio
The payout ratio is a critical indicator of dividend sustainability. A higher EPS-based payout suggests that the company is paying more in dividends than it currently earns.
| Key figure | Ratio |
|---|---|
| EPS-based | 122.15% |
| Free Cash Flow-based | 83.92% |
An EPS payout ratio of 122.15% suggests earnings are not fully covering dividends, while a Free Cash Flow payout ratio of 83.92% shows better coverage, but still underlines the need for earnings growth.
Cashflow & Capital Efficiency
Understanding the cash flow situation is crucial for assessing financial health and sustainability of dividend payments.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 4.21% | 3.82% | 4.30% |
| Earnings Yield | 3.52% | 3.53% | 2.92% |
| CAPEX to Operating Cash Flow | 27.98% | 47.43% | 29.34% |
| Stock-based Compensation to Revenue | 0.93% | 0.73% | 0.00% |
| Free Cash Flow / Operating Cash Flow Ratio | 72.02% | 52.57% | 70.63% |
The data reflects a reasonable cash flow generation with a strong capacity to reinvest and remain competitive, highlighting capital efficiency with a focus on growth investments.
Balance Sheet & Leverage Analysis
An examination of the company's leverage and financial ratios offers insights into its balance sheet strength and financial flexibility.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 0.73 | 0.75 | 0.84 |
| Debt-to-Assets | 0.39 | 0.40 | 0.42 |
| Debt-to-Capital | 0.42 | 0.43 | 0.46 |
| Net Debt to EBITDA | 3.25 | 3.52 | 3.82 |
| Current Ratio | 0.10 | 0.06 | 0.08 |
| Quick Ratio | 0.10 | 0.06 | 0.08 |
| Financial Leverage | 1.87 | 1.88 | 1.98 |
The increase in debt-to-equity across the years suggests a rising debt level, yet the financial leverage ratio remains manageable, indicating prudent leverage utilization.
Fundamental Strength & Profitability
Profitability metrics such as ROE and margin ratios provide a glimpse into the company's financial adeptness and profit generation capabilities.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 10.58% | 9.04% | 8.84% |
| Return on Assets | 5.67% | 4.81% | 4.47% |
| Net Margin | 31.56% | 25.73% | 24.08% |
| EBIT Margin | 39.69% | 33.52% | 32.56% |
| EBITDA Margin | 66.63% | 59.85% | 59.32% |
| Gross Margin | 34.05% | 34.79% | 32.55% |
Stable profit margins across the years underline efficient management and an ability to maintain profitability under varying market conditions.
Price Development
Dividend Scoring System
| Criterion | Description | Score |
|---|---|---|
| Dividend yield | Attractive yield | 4 |
| Dividend Stability | Consistent history | 5 |
| Dividend growth | Modest growth | 3 |
| Payout ratio | High EPS ratio | 2 |
| Financial stability | Solid balance sheet | 4 |
| Dividend continuity | Long history | 5 |
| Cashflow Coverage | Adequate coverage | 3 |
| Balance Sheet Quality | Manageable leverage | 4 |
Total Score: 30/40
🔍 Rating
Given the robust historical performance and the steady cash flow generation, Mid-America Apartment Communities, Inc. receives a "Hold" rating. While the dividend yield remains attractive, attention should be given to the payout ratios and earnings sustainability to ensure the continued potential for future growth.