Brookfield Business (NYSE:BBUC) Has Announced A Dividend Of $0.0625

Brookfield Business Corporation (NYSE:BBUC) has announced that it will pay a dividend of $0.0625 per share on the 30th of June. The dividend yield is 0.9% based on this payment, which is a little bit low compared to the other companies in the industry.

We've discovered 1 warning sign about Brookfield Business. View them for free.

Brookfield Business' Distributions May Be Difficult To Sustain

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Even though Brookfield Business is not generating a profit, it 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.

Recent, EPS has fallen by 82.6%, so this could continue over the next year. 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.

View our latest analysis for Brookfield Business

Brookfield Business Doesn't Have A Long Payment History

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. The payments haven't really changed that much since 3 years ago. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

The Dividend Has Limited Growth Potential

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, initial appearances might be deceiving. Over the past three years, it looks as though Brookfield Business' EPS has declined at around 83% 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.

Brookfield Business' Dividend Doesn't Look Great

Overall, while some might be pleased that the dividend wasn't cut, we think this may help Brookfield Business make more consistent payments in the future. The company seems to be stretching itself a bit to make such big payments, but it doesn't appear they can be consistent over time. We don't think that this is a great candidate to be an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Brookfield Business that investors need to be conscious of moving forward. Is Brookfield Business not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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