Akelius Residential Property (STO:AKEL D) Is Paying Out A Dividend Of €0.025

The board of Akelius Residential Property AB (publ) (STO:AKEL D) has announced that it will pay a dividend on the 10th of November, with investors receiving €0.025 per share. Based on this payment, the dividend yield on the company's stock will be 5.4%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Akelius Residential Property

Akelius Residential Property's Distributions May Be Difficult To Sustain

A big dividend yield for a few years doesn't mean much if it can't be sustained. Akelius Residential Property is unprofitable despite paying a dividend, and it is paying out 340% of its free cash flow. These payout levels would generally be quite difficult to keep up.

Over the next year, EPS might fall by 74.0% based on recent performance. This will push the company into unprofitability, which means the managers will have to choose between suspending the dividend, or paying it out of cash reserves.

Akelius Residential Property Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The last annual payment of €0.10 was flat on the annual payment from4 years ago. Akelius Residential Property hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

Dividend Growth Potential Is Shaky

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately things aren't as good as they seem. Earnings per share has been sinking by 74% over the last five years. Dividend payments are likely to come under some pressure unless EPS can pull out of the nosedive it is in.

Akelius Residential Property's Dividend Doesn't Look Great

Overall, while some might be pleased that the dividend wasn't cut, we think this may help Akelius Residential Property make more consistent payments in the future. The company's earnings aren't high enough to be making such big distributions, and it isn't backed up by strong growth or consistency either. Overall, this doesn't get us very excited from an income standpoint.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 3 warning signs for Akelius Residential Property that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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