Is It Worth Considering Bridgemarq Real Estate Services Inc. (TSE:BRE) For Its Upcoming Dividend?
It looks like Bridgemarq Real Estate Services Inc. (TSE:BRE) is about to go ex-dividend in the next four days. This means that investors who purchase shares on or after the 30th of December will not receive the dividend, which will be paid on the 29th of January.
Bridgemarq Real Estate Services's next dividend payment will be CA$0.11 per share, and in the last 12 months, the company paid a total of CA$1.35 per share. Last year's total dividend payments show that Bridgemarq Real Estate Services has a trailing yield of 9.2% on the current share price of CA$14.71. If you buy this business for its dividend, you should have an idea of whether Bridgemarq Real Estate Services's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Check out our latest analysis for Bridgemarq Real Estate Services
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Bridgemarq Real Estate Services paid out 128% of profit in the past year, which we think is typically not sustainable unless there are mitigating characteristics such as unusually strong cash flow or a large cash balance. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Dividends consumed 63% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.
It's disappointing to see that the dividend was not covered by profits, but cash is more important from a dividend sustainability perspective, and Bridgemarq Real Estate Services fortunately did generate enough cash to fund its dividend. Still, if the company repeatedly paid a dividend greater than its profits, we'd be concerned. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits.
Click here to see how much of its profit Bridgemarq Real Estate Services paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Bridgemarq Real Estate Services has grown its earnings rapidly, up 21% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. It looks like the Bridgemarq Real Estate Services dividends are largely the same as they were 10 years ago.
Final Takeaway
From a dividend perspective, should investors buy or avoid Bridgemarq Real Estate Services? Bridgemarq Real Estate Services has been growing its earnings per share nicely, although judging by the difference between its profit and cashflow payout ratios, the company might have reported some write-offs over the last year. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.
With that being said, if dividends aren't your biggest concern with Bridgemarq Real Estate Services, you should know about the other risks facing this business. Be aware that Bridgemarq Real Estate Services is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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.
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