Bird Construction (TSE:BDT) Has Announced A Dividend Of CA$0.0358

The board of Bird Construction Inc. (TSE:BDT) has announced that it will pay a dividend on the 19th of January, with investors receiving CA$0.0358 per share. The dividend yield will be 3.4% based on this payment which is still above the industry average.

View our latest analysis for Bird Construction

Bird Construction's Earnings Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Bird Construction's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 60.5%. If the dividend continues along recent trends, we estimate the payout ratio will be 21%, which is in the range that makes us comfortable with the sustainability of the dividend.

Bird Construction's Track Record Isn't Great

The dividend is currently lower than it was 10 years ago, indicating that there has been a downward trend over that time. The annual payment during the last 10 years was CA$0.76 in 2013, and the most recent fiscal year payment was CA$0.43. This works out to be a decline of approximately 5.5% per year over that time. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

The Dividend Looks Likely To Grow

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Bird Construction has seen EPS rising for the last five years, at 38% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like Bird Construction's Dividend

Overall, we like to see the dividend staying consistent, and we think Bird Construction might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 8 Bird Construction analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Bird Construction not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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