Decisive Dividend's (CVE:DE) Dividend Will Be CA$0.045

Decisive Dividend Corporation's (CVE:DE) investors are due to receive a payment of CA$0.045 per share on 14th of March. This means the annual payment is 8.8% of the current stock price, which is above the average for the industry.

See our latest analysis for Decisive Dividend

Decisive Dividend's Projections Indicate Future Payments May Be Unsustainable

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, the company was paying out 389% of what it was earning. 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 71.6%. If the dividend continues on its recent course, the company could be paying out several times what it earns in the next 12 months, which could start applying pressure to the balance sheet.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2015, the annual payment back then was CA$0.24, compared to the most recent full-year payment of CA$0.54. This means that it has been growing its distributions at 8.4% per annum over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

Decisive Dividend Might Find It Hard To Grow Its Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Decisive Dividend has seen EPS rising for the last five years, at 53% per annum. While EPS is growing rapidly, Decisive Dividend paid out a very high 389% of its income as dividends. If earnings continue to grow, this dividend may be sustainable, but we think a payout this high definitely bears watching.

The Dividend Could Prove To Be Unreliable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Decisive Dividend's payments, as there could be some issues with sustaining them into the future. In general, the distributions are a little bit higher than we would like, but we can't ignore the fact the quickly growing earnings gives this stock great potential in the future. Overall, we don't think this company has the makings of a good income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 5 warning signs for Decisive Dividend you should be aware of, and 2 of them don't sit too well with us. Is Decisive Dividend not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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