Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) Will Pay A Dividend Of CA$0.0013

The board of Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) has announced that it will pay a dividend of CA$0.0013 per share on the 16th of October. This means that the annual payment will be 2.7% of the current stock price, which is in line with the average for the industry.

View our latest analysis for Marwest Apartment Real Estate Investment Trust

Marwest Apartment Real Estate Investment Trust's Payment Has Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, Marwest Apartment Real Estate Investment Trust's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, EPS could fall by 69.9% if the company can't turn things around from the last few years. Assuming the dividend continues along recent trends, we believe the payout ratio could be 10.0%, which we are pretty comfortable with and we think is feasible on an earnings basis.

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

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 2 years, which isn't that long in the grand scheme of things. Since 2021, the annual payment back then was CA$0.015, compared to the most recent full-year payment of CA$0.0153. Its dividends have grown at less than 1% per annum over this time frame. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

Dividend Growth Potential Is Shaky

Investors could be attracted to the stock based on the quality of its payment history. Unfortunately things aren't as good as they seem. Marwest Apartment Real Estate Investment Trust's earnings per share has fallen 70% over the past year. Decreases in earnings as large as this could start to put some pressure on the dividend if they are sustained for several years. However, we would never make any decisions based on only a single year of data, especially when assessing long term dividend potential.

Our Thoughts On Marwest Apartment Real Estate Investment Trust's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Marwest Apartment Real Estate Investment Trust's payments, as there could be some issues with sustaining them into the future. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. Overall, we don't think this company has the makings of a good income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 4 warning signs for Marwest Apartment Real Estate Investment Trust you should be aware of, and 2 of them don't sit too well with us. 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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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.