Akelius Residential Property (STO:AKEL D) Will Pay A Dividend Of €0.025

Akelius Residential Property AB (publ) (STO:AKEL D) will pay a dividend of €0.025 on the 12th of February. This means the annual payment is 5.9% of the current stock price, which is above the average for the industry.

See 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 isn't generating any profits, and it is paying out a very high proportion of the cash it is earning. This makes us feel that the dividend will be hard to maintain.

Recent, EPS has fallen by 72.2%, so this could continue over the next year. 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 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. The payments haven't really changed that much since 4 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. However, initial appearances might be deceiving. Over the past five years, it looks as though Akelius Residential Property's EPS has declined at around 72% a year. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

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. The dividend doesn't inspire confidence that it will provide solid income in the future.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 3 warning signs for Akelius Residential Property that investors should know about before committing capital to this stock. 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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