Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company’s books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company’s books on the record date. Meaning, you will need to purchase Marwest Apartment Real Estate Investment Trust’s shares before the 30th of June to receive the dividend, which will be paid on the 15th of July.
The company’s next dividend payment will be CA$0.00146 per share. Last year, in total, the company distributed CA$0.017 to shareholders. Calculating the last year’s worth of payments shows that Marwest Apartment Real Estate Investment Trust has a trailing yield of 2.2% on the current share price of CA$0.78. We love seeing companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our golden goose! So we need to investigate whether Marwest Apartment Real Estate Investment Trust can afford its dividend, and if the dividend could grow.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Marwest Apartment Real Estate Investment Trust paid out just 12% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
View our latest analysis for Marwest Apartment Real Estate Investment Trust
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we’re discomforted by Marwest Apartment Real Estate Investment Trust’s 24% per annum decline in earnings in the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. Marwest Apartment Real Estate Investment Trust has delivered 2.7% dividend growth per year on average over the past five years.
The Bottom Line
Is Marwest Apartment Real Estate Investment Trust worth buying for its dividend? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. At best we would put it on a watch-list to see if business conditions improve, as it doesn’t look like a clear opportunity right now.
If you’re not too concerned about Marwest Apartment Real Estate Investment Trust’s ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, we’ve found 4 warning signs for Marwest Apartment Real Estate Investment Trust (2 are a bit unpleasant!) that deserve your attention before investing in the shares.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.