Bridgemarq Real Estate Services (TSE:BRE) Will Pay A Dividend Of CA$0.11

The board of Bridgemarq Real Estate Services Inc. (TSE:BRE) has announced that it will pay a dividend of CA$0.11 per share on the 30th of June. The dividend yield will be 9.6% based on this payment which is still above the industry average.

See our latest analysis for Bridgemarq Real Estate Services

Bridgemarq Real Estate Services Is Paying Out More Than It Is Earning

If the payments aren't sustainable, a high yield for a few years won't matter that much. 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.

EPS is set to grow by 5.7% over the next year if recent trends continue. If the dividend continues on its recent course, the payout ratio in 12 months could be 138%, which is a bit high and could start applying pressure to the balance sheet.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from CA$1.30 in 2012 to the most recent annual payment of CA$1.35. Dividend payments have grown at less than 1% a year over this period. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

Dividend Growth May Be Hard To Achieve

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Bridgemarq Real Estate Services has impressed us by growing EPS at 5.7% per year over the past five years. While EPS is growing at a decent rate, but future growth could be limited by the amount of earnings being paid out to shareholders.

The Dividend Could Prove To Be Unreliable

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The payments are bit high to be considered sustainable, and the track record isn't the best. 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. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 4 warning signs for Bridgemarq Real Estate Services you should be aware of, and 3 of them don't sit too well with us. 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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