Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) Could Be A Buy For Its Upcoming Dividend

Readers hoping to buy Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order 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 31st of July in order to be eligible for the dividend, which will be paid on the 15th of August.

The company's next dividend payment will be CA$0.0013 per share, on the back of last year when the company paid a total of CA$0.015 to shareholders. Looking at the last 12 months of distributions, Marwest Apartment Real Estate Investment Trust has a trailing yield of approximately 2.2% on its current stock price of CA$0.71. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Marwest Apartment Real Estate Investment Trust

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 is paying out just 2.2% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Marwest Apartment Real Estate Investment Trust paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For that reason, it's encouraging to see Marwest Apartment Real Estate Investment Trust's earnings over the past year have risen 29%. While we'd be remiss not to point out that a year is a very short time in dividend investing, it's an encouraging sign so far.

One year is not very long in the grand scheme of things though, so we wouldn't draw too strong a conclusion based on these results.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Marwest Apartment Real Estate Investment Trust has delivered an average of 1.3% per year annual increase in its dividend, based on the past three years of dividend payments. Earnings per share have been growing much quicker than dividends, potentially because Marwest Apartment Real Estate Investment Trust is keeping back more of its profits to grow the business.

The Bottom Line

Has Marwest Apartment Real Estate Investment Trust got what it takes to maintain its dividend payments? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, Marwest Apartment Real Estate Investment Trust looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

On that note, you'll want to research what risks Marwest Apartment Real Estate Investment Trust is facing. For example, we've found 4 warning signs for Marwest Apartment Real Estate Investment Trust (1 can't be ignored!) that deserve your attention before investing in the shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com