Akelius Residential Property (STO:AKEL D) Will Pay 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 makes the dividend yield 7.2%, which will augment investor returns quite nicely.

Check out our latest analysis for Akelius Residential Property

Akelius Residential Property Might Find It Hard To Continue The Dividend

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Akelius Residential Property is unprofitable despite paying a dividend, and it is paying out 485% of its free cash flow. These payout levels would generally be quite difficult to keep up.

Over the next year, EPS might fall by 72.2% based on recent performance. This means the company will be unprofitable and managers could face the tough choice between continuing to pay the dividend or taking pressure off the balance sheet.

Akelius Residential Property Is Still Building Its Track Record

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn't that long in the grand scheme of things. The last annual payment of €0.10 was flat on the annual payment from4 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

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. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future.

Akelius Residential Property's Dividend Doesn't Look Great

Overall, this isn't a great candidate as an income investment, even though the dividend was stable this year. 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. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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