Bridgemarq Real Estate Services Inc. (TSE: BRE) investors are expected to receive a payment of C $ 0.11 per share on December 31. This makes the dividend yield of 7.2%, which will increase investor returns quite well.
See our latest review for Bridgemarq Real Estate Services
Bridgemarq Real Estate Services may struggle to maintain dividend
A high dividend yield for a few years doesn’t mean much if it can’t be sustained. Bridgemarq Real Estate Services is not profitable despite paying a dividend, and it pays 116% of its free cash flow. This gives us the impression that the dividend will be difficult to maintain.
Recently, EPS fell 19.6%, which could continue next year. This means the company will not be profitable and executives could be faced with the difficult choice between continuing to pay the dividend or reducing the pressure on the balance sheet.
While the company has been paying a dividend for a long time, it has reduced the dividend at least once in the past 10 years. The dividend went from CA $ 1.60 in 2011 to the last annual payment of CA $ 1.35. This represents a decrease of about 1.7% per year during this period. Falling dividends are usually not what we are looking for, as they may indicate that the business is facing some challenges.
The potential for dividend growth is fragile
With a relatively volatile dividend, it is even more important to see if earnings per share increase. Over the past five years, it appears that Bridgemarq Real Estate Services‘ EPS has declined by around 20% per year. Dividend payments are likely to come under some pressure unless EPS can get out of the slump it is in.
Bridgemarq Real Estate Services dividend does not look good
Overall, it is not a good candidate for an income investment, although the dividend has remained stable this year. The company’s profits are not high enough to make such large distributions, nor are they supported by strong growth or consistency. Considering all of these factors, we wouldn’t depend on that dividend if we wanted to live off that income.
Investors generally tend to favor companies with a consistent and stable dividend policy over those that operate irregularly. Meanwhile, despite the importance of dividend payments, they aren’t the only factors our readers should be aware of when valuing a business. For example, we have identified 4 warning signs for Bridgemarq Real Estate Services (3 shouldn’t be ignored!) Which you should be aware of before investing. Looking for more high yield dividend ideas? Try our organized list of big dividend payers.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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