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

Akelius Residential Property AB (publ)'s (STO:AKEL D) investors are due to receive a payment of €0.025 per share on 12th of February. This means the annual payment is 6.4% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Akelius Residential Property

Akelius Residential Property's Distributions May Be Difficult To Sustain

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This is quite a strong warning sign that the dividend may not be sustainable.

Looking forward, earnings per share could 72.2% over the next year if the trend of the last few years can't be broken. This means the company won't be turning a profit, which could place managers in the tough spot of having to choose between suspending the dividend or putting more pressure on the balance sheet.

Akelius Residential Property Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. There hasn't been much of a change in the dividend over the last 4 years. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

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. Earnings per share has been sinking by 72% 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. 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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