BRE) For Its Upcoming Dividend | Ezine Daddy

Hope readers to buy Bridgemarq Real Estate Services Inc. (TSE:BRE) for its dividend is expected to trade shortly as the stock is close to ex-dividend trading. The ex-dividend date is one business day prior to a company’s record date when the company determines which shareholders are entitled to receive a dividend. It’s important to be aware of the ex-dividend date because every trade in the stock must be settled on or before the ex-dividend date. In other words, investors can buy Bridgemarq Real Estate Services stock before April 28 to be eligible for the dividend, which will be paid on May 31.

The company’s next dividend payment will be $0.11 per share after the company paid a total of $1.35 to shareholders last year. Total dividend payments over the past year show that Bridgemarq Real Estate Services has a trailing yield of 8.9% on its current share price of $15.19. Dividends make an important contribution to investment returns for long-term holders, but only if the dividend continues to be paid. So we need to examine whether Bridgemarq Real Estate Services can afford its dividend and whether the dividend could increase.

Check out our latest analysis for Bridgemarq Real Estate Services

When a company pays out more dividends than it earns, the dividend can become unsustainable — hardly an ideal situation. An unusually high payout ratio of 269% of earnings suggests something different is happening than the usual earnings payout to shareholders. However, cash flow is typically more important than earnings in assessing dividend sustainability. Therefore, we should always check whether the company has generated enough cash to be able to afford its dividend. Over the past year, it’s paid out more than three-quarters (83%) of its generated free cash flow, which is pretty high and may be starting to limit reinvestment in the company.

It’s good to see that while Bridgemarq Real Estate Services’ dividends haven’t been covered by earnings, they’re at least financially affordable. If executives continued to pay more dividends than the company reported earnings, we’d take that as a red flag. Exceptionally few companies are able to consistently pay a dividend that exceeds their earnings.

Click here to see how much of its earnings Bridgemarq Real Estate Services has paid out over the last 12 months.

historical dividend

Have profits and dividends grown?

Companies with declining earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Readers will then understand why we’re concerned that Bridgemarq Real Estate Services’ earnings per share have fallen 11% annually over the past five years. Such a sharp drop raises doubts about the future sustainability of the dividend.

Many investors judge a company’s dividend performance by evaluating how much dividend payments have changed over time. Bridgemarq Real Estate Services’ dividend payments are virtually unchanged from 10 years ago. When a company’s dividend is flat while earnings are falling, it’s usually a sign that it’s paying out a larger percentage of its earnings. This can become unsustainable if revenue falls far enough.

The final result

Should investors buy Bridgemarq Real Estate Services for the upcoming dividend? Earnings per share were down, which isn’t encouraging. Additionally, Bridgemarq Real Estate Services pays out much of its profits and more than half of its free cash flow. It’s hard to say whether the company has the financial resources and time to turn things around without cutting its dividend. This isn’t an attractive combination from a dividend perspective, and we’re leaning toward avoiding it for now.

With that in mind, if Bridgemarq Real Estate Services’ poor dividend characteristics don’t worry you, you should be aware of the risks involved in this business. You should find out more about this 4 warning signs We discovered Bridgemarq Real Estate Services (including 3 that aren’t a good fit for us).

If you’re looking for strong dividend payers in the market, we recommend Check out our picks for the top dividend stocks.

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This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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