Let’s start with one of the first companies which I analyzed, in which I invested and are still invested for dividend growth.
Gav-Yam Lands Corporation (GVYM, Company Web Site) is one of Israel’s largestreal estate companies, specializing in the initiation, development, construction, leasing, maintenance, and management of hi-tech, logistics, and industrial parks, as well as in the construction of dedicated complexes planned for long-term leasing. Gav-Yam also provides a variety of maintenance management services to tenants throughout the leasing period. Gav-Yam continuously explores new areas and opportunities for development and the improvement of existing sites in prime locations. The company was founded in 1928, and has been listed on the Tel Aviv Stock Exchange since 1978.
Gav-Yam is “home” to some of the world’s largest (and best) companies (from the 2022 EOY capital market presentation):
The company focuses on building long-term income generating properties, owning about 1090 thousand square meters of rental space with 98% occupancy at the end of 2022, also owning many undeveloped land properties with future potential. Their office and industrial parks are located in highly requested areas such as the Matam hi-tech park, Herzlya Pituach’s industrial area, Tel Aviv, Jerusalem, and many others. On top of the income from these leases, Gav-Yam provides management and maintenance services that create an extra stream of income for the company.
Let’s take a look at the company’s financials. My preferred way to look at numbers is on a per-share basis, as this neutralizes the effect of share distribution or repurchase done by the company. I also analyze the raw numbers, but the per-share are always my starting point.
In the last 10 years, Gav-Yam has been able to grow revenue per share from 1.93 NIS in 2012 to 3.02 NIS in 2022, which means an average growth of 10.9% in the last ten years.
Looking at the other end of the income statement, earnings per share have grown a lot in the last 10 years, going from 0.98 NIS in 2012 to 4.33 NIS 2022, an average yearly grown of 33.5%. Interestingly, much of this gain comes from the COVID pandemic period. This is something that needs more investigation and analysis.
Lastly, and the main reason that I’m looking at Gav-Yam, come the dividends. There are a couple of metrics that I look at to assess the dividends of a company: the dividend per share, the dividend payout ratio.
Gav-Yam has distributed dividends consistently in the past 10 years, from 0.75 to 2.66 NIS of dividends per share, which is a a 19% growth in the last 10 years. But it seems the last 10 years are not exactly “regular” years, since in 2022 the dividend was extremely high. I we take out this outlier the dividend grew 5.2% annually from 2012 to 2021, which is also good.
The dividend payout ratio shows how much of the company’s earnings are being distributed as dividends. Since 2012 it has been all over the place with a maximum of 0.81% and a minimum of 24%, and last fiscal year was a comfortable 0.61%, which is OK for a real estate company.
In summary, Gav-Yam is a good company, with robust earnings and consistent and increasing dividends.
Disclaimer: I own stock in the company.
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