Bridgemarq Real Estate Services (TSE:BRE) Has Affirmed Its Dividend Of CA$0.1125

The board of Bridgemarq Real Estate Services Inc. (TSE:BRE) has announced that it will pay a dividend on the 28th of April, with investors receiving CA$0.1125 per share. The dividend yield will be 9.9% based on this payment which is still above the industry average.

See our latest analysis for Bridgemarq Real Estate Services

Bridgemarq Real Estate Services' Payment Has Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Bridgemarq Real Estate Services was paying out quite a large proportion of both earnings and cash flow, with the dividend being 115% of cash flows. Paying out such a high proportion of cash flows certainly exposes the company to cutting the dividend if cash flows were to reduce.

Looking forward, earnings per share could rise by 11.0% 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 55% by next year, which is in a pretty sustainable range.

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 annual payment back then was CA$1.1, compared to the most recent full-year payment of CA$1.35. This implies that the company grew its distributions at a yearly rate of about 2.0% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Bridgemarq Real Estate Services has grown earnings per share at 11% per year over the past five years. Recently, the company has been able to grow earnings at a decent rate, but with the payout ratio on the higher end we don't think the dividend has many prospects for growth.

Our Thoughts On Bridgemarq Real Estate Services' Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Bridgemarq Real Estate Services' payments, as there could be some issues with sustaining them into the future. While Bridgemarq Real Estate Services is earning enough to cover the payments, the cash flows are lacking. 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. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 5 warning signs for Bridgemarq Real Estate Services (3 shouldn't be ignored!) that you should be aware of before investing. Is Bridgemarq Real Estate Services not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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