Brookfield Business' (NYSE:BBUC) Dividend Will Be $0.0625

The board of Brookfield Business Corporation (NYSE:BBUC) has announced that it will pay a dividend on the 28th of June, with investors receiving $0.0625 per share. This payment means the dividend yield will be 1.2%, which is below the average for the industry.

See our latest analysis for Brookfield Business

Brookfield Business' Distributions May Be Difficult To Sustain

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Despite not generating a profit, Brookfield Business is still paying a dividend. It is also not generating any free cash flow, we definitely have concerns when it comes to the sustainability of the dividend.

Over the next year, EPS could fall pretty quickly unless something improves in the business. This could mean that the management team has to make some tough choices about cutting the dividend or putting extra pressure on the balance sheet.

Brookfield Business 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 2 years, which isn't that long in the grand scheme of things. There hasn't been much of a change in the dividend over the last 2 years. Brookfield Business 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. However, things aren't all that rosy. Brookfield Business has seen EPS fall by 454% over the last 12 months. Such a large drop can indicate that the business has run into some trouble and might end up in the dividend having to be reduced. Any one year of performance can be misleading for a variety of reasons, so we wouldn't like to form any strong conclusions based on these numbers alone.

Brookfield Business' Dividend Doesn't Look Great

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. Overall, this doesn't get us very excited from an income standpoint.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Brookfield Business 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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