The board of Akelius Residential Property AB (publ) (STO:AKEL D) has announced that it will pay a dividend of €0.025 per share on the 12th of February. Based on this payment, the dividend yield on the company’s stock will be 6.5%, which is an attractive boost to shareholder returns.
See our latest analysis for Akelius Residential Property
Akelius Residential Property’s Distributions May Be Difficult To Sustain
If the payments aren’t sustainable, a high yield for a few years won’t matter that much. Akelius Residential Property isn’t generating any profits, and it is paying out a very high proportion of the cash it is earning. This makes us feel that the dividend will be hard to maintain.
Over the next year, EPS might fall by 72.2% based on recent performance. 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.
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 payments haven’t really changed that much since 4 years ago. We like that the dividend hasn’t been shrinking. However we’re conscious that the company hasn’t got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.
Dividend Growth Potential Is Shaky
The company’s investors will be pleased to have been receiving dividend income for some time. However, things aren’t all that rosy. Akelius Residential Property’s EPS has fallen by approximately 72% 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.
Akelius Residential Property’s 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 isn’t making enough to be paying as much as it is, and the other factors don’t look particularly promising either. Overall, this doesn’t get us very excited from an income standpoint.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we’ve identified 3 warning signs for Akelius Residential Property that you should be aware of before investing. 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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