Don't Race Out To Buy Bridge Investment Group Holdings Inc. (NYSE:BRDG) Just Because It's Going Ex-Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Bridge Investment Group Holdings Inc. (NYSE:BRDG) is about to go ex-dividend in just 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. This means that investors who purchase Bridge Investment Group Holdings' shares on or after the 7th of March will not receive the dividend, which will be paid on the 22nd of March.
The company's next dividend payment will be US$0.07 per share. Last year, in total, the company distributed US$0.66 to shareholders. Looking at the last 12 months of distributions, Bridge Investment Group Holdings has a trailing yield of approximately 8.8% on its current stock price of US$7.46. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Bridge Investment Group Holdings has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Bridge Investment Group Holdings
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Bridge Investment Group Holdings reported a loss after tax last year, which means it's paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Bridge Investment Group Holdings was unprofitable last year, and sadly its loss per share worsened by 128% on the previous year.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Bridge Investment Group Holdings has seen its dividend decline 17% per annum on average over the past two years, which is not great to see. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.
Remember, you can always get a snapshot of Bridge Investment Group Holdings's financial health, by checking our visualisation of its financial health, here.
Final Takeaway
From a dividend perspective, should investors buy or avoid Bridge Investment Group Holdings? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Worse, the general trend in its earnings looks negative in recent years. These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.
Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with Bridge Investment Group Holdings. For example, we've found 3 warning signs for Bridge Investment Group Holdings that we recommend you consider before investing in the business.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
