Regular readers will know that we love our dividends at Simply Wall St, which is why it’s exciting to see Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company’s books on the record date. In other words, investors can purchase Marwest Apartment Real Estate Investment Trust’s shares before the 30th of January in order to be eligible for the dividend, which will be paid on the 15th of February.
The company’s next dividend payment will be CA$0.001275 per share, and in the last 12 months, the company paid a total of CA$0.015 per share. Calculating the last year’s worth of payments shows that Marwest Apartment Real Estate Investment Trust has a trailing yield of 2.1% on the current share price of CA$0.73. We love seeing companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it’s growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Marwest Apartment Real Estate Investment Trust has a low and conservative payout ratio of just 4.0% of its income after tax.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Marwest Apartment Real Estate Investment Trust’s earnings per share plummeted 54% over the past year,which is rarely good news for the dividend.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, two years ago, Marwest Apartment Real Estate Investment Trust has lifted its dividend by approximately 1.0% a year on average.
To Sum It Up
Is Marwest Apartment Real Estate Investment Trust worth buying for its dividend? Marwest Apartment Real Estate Investment Trust’s earnings per share are down sharply over the last year, although we note that it is paying out a low fraction of its earnings. Ordinarily we wouldn’t be too concerned about a one-year decline, but the -54% drop in earnings per share is enough to make us think twice. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we’re on the fence about its dividend prospects.
However if you’re still interested in Marwest Apartment Real Estate Investment Trust as a potential investment, you should definitely consider some of the risks involved with Marwest Apartment Real Estate Investment Trust. Our analysis shows 4 warning signs for Marwest Apartment Real Estate Investment Trust that we strongly recommend you have a look at before investing in the company.
If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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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.