Sienna Senior Living (TSE:SIA) Has Affirmed Its Dividend Of CA$0.078

Sienna Senior Living Inc.'s (TSE:SIA) investors are due to receive a payment of CA$0.078 per share on 15th of February. This makes the dividend yield 7.9%, which will augment investor returns quite nicely.

See our latest analysis for Sienna Senior Living

Sienna Senior Living Might Find It Hard To Continue The Dividend

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Sienna Senior Living is unprofitable despite paying a dividend, and it is paying out 122% of its free cash flow. These payout levels would generally be quite difficult to keep up.

If the trend of the last few years continues, EPS will grow by 0.2% over the next 12 months. The company seems to be going down the right path, but it will probably take a little bit longer than a year to cross over into profitability. Unless this happens fairly soon, the dividend could start to come under pressure.

Sienna Senior Living Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of CA$0.90 in 2014 to the most recent total annual payment of CA$0.936. Dividend payments have grown at less than 1% a year over this period. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. However, Sienna Senior Living's EPS was effectively flat over the past five years, which could stop the company from paying more every year. With EPS growth hard to come by and the company not turning a profit, we wouldn't be particularly optimistic about the growth prospects for Sienna Senior Living's dividend in the future.

Sienna Senior Living'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. Although they have been consistent in the past, we think the payments are a little high to be sustained. We would be a touch cautious of relying on this stock primarily for the dividend income.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for Sienna Senior Living that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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