Bridgemarq Real Estate Services (TSE:BRE) Has Announced A Dividend Of CA$0.1125

The board of Bridgemarq Real Estate Services Inc. (TSE:BRE) has announced that it will pay a dividend of CA$0.1125 per share on the 31st of October. The dividend yield will be 9.8% based on this payment which is still above the industry average.

Check out our latest analysis for Bridgemarq Real Estate Services

Bridgemarq Real Estate Services Doesn't Earn Enough To Cover Its Payments

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, the company wasn't making enough to cover what it was paying to shareholders. It will be difficult to sustain this level of payout so we wouldn't be confident about this continuing.

If the company can't turn things around, EPS could fall by 18.8% over the next year. If the dividend continues along the path it has been on recently, the payout ratio in 12 months could be 1,196%, which is definitely a bit high to be sustainable going forward.

Bridgemarq Real Estate Services Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from CA$1.1 total annually to CA$1.35. This means that it has been growing its distributions at 2.0% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Has Limited Growth Potential

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Unfortunately things aren't as good as they seem. Bridgemarq Real Estate Services' EPS has fallen by approximately 19% per year during the past five years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

The Dividend Could Prove To Be Unreliable

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 probably look elsewhere for an income investment.

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. To that end, Bridgemarq Real Estate Services has 5 warning signs (and 4 which make us uncomfortable) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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