Home Future payments Bridgemarq Real Estate Services (TSE: BRE) to pay dividend of CA $...

Bridgemarq Real Estate Services (TSE: BRE) to pay dividend of CA $ 0.11

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Bridgemarq Real Estate Services Inc. (TSE: BRE) will pay a dividend of C $ 0.11 on September 30. This makes the dividend yield of 8.0%, which will increase investor returns quite well.

See our latest review for Bridgemarq Real Estate Services

Bridgemarq Real Estate Services may struggle to maintain dividend

While it’s great to have a strong dividend yield, we also need to determine if the payout is sustainable. Bridgemarq Real Estate Services is not profitable despite the payment of a dividend, and it pays out 113% of its free cash flow. This is a pretty strong warning signal that the dividend may not be sustainable.

Looking ahead, earnings per share could reach 12.8% next year if the trend of recent years cannot be broken. This means the business will not be profitable and executives could be faced with the difficult choice between continuing to pay the dividend or reducing the pressure on the balance sheet.

TSX: BRE Historic dividend August 13, 2021

Dividend volatility

While the company has been paying a dividend for a long time, it has reduced the dividend at least once in the past 10 years. Since 2011, the first annual payment was C $ 1.40, compared to the most recent annual payment of C $ 1.35. Payments declined at a very slow pace during this period. Falling dividends are usually not what we are looking for, as they may indicate that the business is facing some challenges.

The potential for dividend growth is fragile

With a relatively volatile dividend, it is even more important to assess whether earnings per share are increasing, which could indicate a growing dividend in the future. Earnings per share have fallen 13% over the past five years. A sharp drop in earnings per share isn’t terrible from a dividend standpoint. Even conservative payout ratios can be put under pressure if earnings fall enough.

Bridgemarq Real Estate Services dividend does not look good

Overall, while some might be happy that the dividend has not been reduced, we believe it could help Bridgemarq Real Estate Services make more consistent payments going forward. The company doesn’t earn enough to pay as much as it does, and the other factors don’t look particularly promising either. All in all, this does not excite us very much from a revenue standpoint.

Companies with a stable dividend policy are likely to benefit from greater investor interest than those with a more inconsistent approach. At the same time, there are other factors that our readers should be aware of before investing any capital in a stock. Concrete example: we have spotted 4 warning signs for Bridgemarq Real Estate Services (3 of which are potentially serious!) that you should be aware of. Looking for more high yield dividend ideas? Try our organized list of big dividend payers.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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