Critical Evaluation and Developmental Activities †MyAssignmenthelp

Question: Discuss about the Critical Evaluation and Developmental Activities. Answer: Introduction The current study is based on the critical evaluation of Aveo Retirement Villages dividend history in past 5 years, by considering the company's dividend policy and dividend level. On the basis of the analysis, recommendation on preferred policy and dividend level will be provided and an appropriate conclusion and reasoning will be briefed at the end. Aveo Group Limited is into the business of development, operation and management of retirement communities. There are various activities the Company is involved into but principally top in list are investment in retirement villages and their development and management; developmental activities for the purpose of used properties like resale of land as well as residential, commercial, retail and industrial property; it also makes investment in, and does management of real estate sectors income-producing retail, commercial and industrial property; building of commercial, industrial and residential nature and construction for 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 retirement villages and specific aged care facilities so as to produce rental and other income. The other non-retirement segment develops the residential, commercial and retail property for public and is not segment specifically. Past 5 years dividend history of AVEO Group Limited Table 1: Aveos Dividend History Aveos Dividend History 2013 (in ) 2014 (in ) 2015 (in ) 2016 (in ) 2017 (in ) H F Result - 4 5 8 9 Final 1 - - - - Interim - - - - - Table 2 Aveos Dividend Yield Aveos Annual Dividend Yield 2015 2016 2017 Annual Dividend Yield (in %) 1.9 2.5 3.2 Aveos Annual Dividend ((in ) 5 8 9 Table 3 Aveos Return on Equity, Shareholders Return and Dividend Payout Ratio Aveos Group Limited Particulars 2013 2014 2015 2016 2017 Return on equity (in %) 4.2 8.8 5.3 Shareholders Return (in %) - - 27.7 26 -9.5 Payout Ratio (in %) - - - 29 50 From the Table 1 given above, it is clear that Aveo Group Limited has distributed the small sum of dividend in a period of last 5 years but in an increasing fashion. Therefore its dividend payout ratio is showing a rising trend from 29 to 50 in Figure 3. Also according to Table 2 given above, the Annual dividend is gradually rising in order from 5-8-9 and so is its dividend yield. That is a very systematic and planned way a company has distributed to its stakeholders in last few years in an increasing order satisfying the gut of an investor, which would mean that the company has not shown any disappointing performance. Critical evaluation of dividend history and earnings per share As per the statistics are given in Figure 1 and Figure 2, read with Figure 3 given above, the Company has consistently paid rising dividend since 2013. Also, the earning on the equity has risen from 2015. According to which it can be said that the company payout history is growing with payout ratio rising to nearly double from 2016. Although the shareholder's return shows a negative fall in 2017 but cannot be treated as a negative feedback in entirety. Year Securities price at year-end (in $) Profit after tax ($m) Price-earnings ratio 2013 1.27 39.2 9.3 2014 2.06 42.1 21.7 2015 2.58 54.7 23.7 2016 3.17 89 18.6 2017 2.78 108.4 14.7 Based on the statistics provided in the figure above, Aveos security prices, as well as the profit, earned after tax is showing an ascending order. This shows that the company is in its growth period and is well to do in order to attract and satisfy the investors intentions as that of a profitable stock (Aveo Group (AOG), 2017). The stock is recommendable to investors looking at it rising payout in addition to its profits, dividend and stock price over the period of 5 years. Conclusion Based on the dividend distributed and the dividend payout the company seems attractive and reasonably well to invest into looking at the real estate industry growth trends in mind. Since the company is systematically and in a planned manner gaining earnings for its investors, it is expected to do well in the foreseeable future (Renneboog and Szilagyi, 2015). Since the consistently rising profits is favourable, adopted policy by the company is viable. References Annual report of Aveo Group. 2017. Available through https://www.aveo.com.au/wp-content/uploads/2017/09/AVEO-2017-Annual-Report.pdf. [Accessed on 6th October 2017]. Aveo Group (AOG). 2017. [Online]. Available through https://www.investsmart.com.au/shares/asx-aog/aveo-group. [Accessed on 6th October 2017]. Renneboog, L. and Szilagyi, P.G., 2015. How relevant is dividend policy under low shareholder protection?.Journal of International Financial Markets, Institutions and Money.