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

Akelius Residential Property AB (publ) (STO:AKEL D) has announced that it will pay a dividend of €0.025 per share on the 10th of February. This means the annual payment is 5.7% 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

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 269% of its free cash flow. These payout levels would generally be quite difficult to keep up.

Recent, EPS has fallen by 73.7%, so this could continue over the next year. 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 Doesn't Have A Long Payment History

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The most recent annual payment of €0.10 is about the same as the annual payment 3 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

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. Akelius Residential Property's EPS has fallen by approximately 74% per year during the past five years. 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.

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

Overall, this isn't a great candidate as an income investment, even though the dividend was stable this year. The company isn't making enough to be paying as much as it is, and the other factors don't look particularly promising either. We don't think that this is a great candidate to be an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 3 warning signs for Akelius Residential Property that investors should take into consideration. Is Akelius Residential Property not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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