Decisive Dividend (CVE:DE) Has Announced A Dividend Of CA$0.045

The board of Decisive Dividend Corporation (CVE:DE) has announced that it will pay a dividend on the 15th of October, with investors receiving CA$0.045 per share. The dividend yield will be 8.8% based on this payment which is still above the industry average.

See our latest analysis for Decisive Dividend

Decisive Dividend's Future Dividends May Potentially Be At Risk

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, the company wasn't making enough to cover what it was paying to shareholders. Without profits and cash flows increasing, it would be difficult for the company to continue paying the dividend at this level.

The next 12 months is set to see EPS grow by 32.9%. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 185% over the next year.

Decisive Dividend's Dividend Has Lacked Consistency

Looking back, Decisive Dividend's dividend hasn't been particularly consistent. This makes us cautious about the consistency of the dividend over a full economic cycle. Since 2015, the annual payment back then was CA$0.24, compared to the most recent full-year payment of CA$0.54. This implies that the company grew its distributions at a yearly rate of about 9.4% over that duration. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.

Dividend Growth Could Be Constrained

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Decisive Dividend has impressed us by growing EPS at 33% per year over the past five years. EPS has been growing well, but Decisive Dividend has been paying out a massive proportion of its earnings, which can make the dividend tough to maintain.

Decisive Dividend's Dividend Doesn't Look Sustainable

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. Strong earnings growth means Decisive Dividend has the potential to be a good dividend stock in the future, despite the current payments being at elevated levels. We don't think Decisive Dividend is a great stock to add to your portfolio if income is your focus.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Case in point: We've spotted 5 warning signs for Decisive Dividend (of which 2 shouldn't be ignored!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.