Akelius Residential Property's (STO:AKEL D) Dividend Will Be €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 August. This means the annual payment is 6.0% 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

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Akelius Residential Property is unprofitable despite paying a dividend, and it is paying out 588% of its free cash flow. These payout levels would generally be quite difficult to keep up.

Over the next year, EPS might fall by 58.4% based on recent performance. 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 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. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.

The Dividend Has Limited Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. Akelius Residential Property's EPS has fallen by approximately 58% per year during the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future.

We're Not Big Fans Of Akelius Residential Property's Dividend

In summary, while it is good to see that the dividend hasn't been cut, we think that at current levels the payment isn't particularly sustainable. 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. We don't think that this is a great candidate to be an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 3 warning signs for Akelius Residential Property that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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