Madison Pacific Properties (TSE:MPC) Has Affirmed Its Dividend Of CA$0.0525

Madison Pacific Properties Inc. (TSE:MPC) will pay a dividend of CA$0.0525 on the 6th of September. This payment means that the dividend yield will be 1.6%, which is around the industry average.

See our latest analysis for Madison Pacific Properties

Madison Pacific Properties' Dividend Is Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable. Before making this announcement, Madison Pacific Properties was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 2.0% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 11% by next year, which is in a pretty sustainable range.

Madison Pacific Properties Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The most recent annual payment of CA$0.105 is about the same as the annual payment 10 years ago. 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.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. Madison Pacific Properties hasn't seen much change in its earnings per share over the last five years. While EPS growth is quite low, Madison Pacific Properties has the option to increase the payout ratio to return more cash to shareholders.

Madison Pacific Properties Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Madison Pacific Properties might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Madison Pacific Properties (1 shouldn't be ignored!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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

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.