Kennedy-Wilson Holdings (NYSE:KW) Has Announced A Dividend Of $0.24

Kennedy-Wilson Holdings, Inc.'s (NYSE:KW) investors are due to receive a payment of $0.24 per share on 6th of July. 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 Kennedy-Wilson Holdings

Kennedy-Wilson Holdings' Distributions May Be Difficult To Sustain

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Kennedy-Wilson Holdings isn't generating any profits, and it is paying out a very high proportion of the cash it is earning. These payout levels would generally be quite difficult to keep up.

Over the next year, EPS is forecast to expand by 86.3%. While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability. Unless this can be done in short order, the dividend might be difficult to sustain.

Kennedy-Wilson Holdings Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.20 total annually to $0.96. This works out to be a compound annual growth rate (CAGR) of approximately 17% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Dividend Growth May Be Hard To Achieve

Investors could be attracted to the stock based on the quality of its payment history. Unfortunately, Kennedy-Wilson Holdings' earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. Kennedy-Wilson Holdings isn't actually turning a profit, which makes it much harder for us to see how they can grow dividends.

The Dividend Could Prove To Be Unreliable

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. We would probably look elsewhere for an income investment.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Kennedy-Wilson Holdings 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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