Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) Has Announced That It Will Be Increasing Its Dividend To CA$0.0013

The board of Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) has announced that it will be paying its dividend of CA$0.0013 on the 15th of September, an increased payment from last year's comparable dividend. This takes the annual payment to 2.5% of the current stock price, which is about average for the industry.

View our latest analysis for Marwest Apartment Real Estate Investment Trust

Marwest Apartment Real Estate Investment Trust's Earnings Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Marwest Apartment Real Estate Investment Trust was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

EPS is set to fall by 69.9% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio could be 10.0%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

Marwest Apartment Real Estate Investment Trust Is Still Building Its Track Record

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The most recent annual payment of CA$0.015 is about the same as the annual payment 2 years ago. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.

The Dividend Has Limited Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, things aren't all that rosy. Over the last year, Marwest Apartment Real Estate Investment Trust's EPS has fallen by 70%. Such a large drop can indicate that the business has run into some trouble and might end up in the dividend having to be reduced. Any one year of performance can be misleading for a variety of reasons, so we wouldn't like to form any strong conclusions based on these numbers alone.

In Summary

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We would probably look elsewhere for an income investment.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Marwest Apartment Real Estate Investment Trust has 5 warning signs (and 2 which are a bit unpleasant) we think you should know about. Is Marwest Apartment Real Estate Investment Trust not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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