Bridgemarq Real Estate Services Inc. (TSE:BRE) has announced that it will pay a dividend of CA$0.1125 per share on the 31st of October. The dividend yield will be 9.6% based on this payment which is still above the industry average.

Check out our latest analysis for Bridgemarq Real Estate Services

Bridgemarq Real Estate Services' Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. At the time of the last dividend payment, Bridgemarq Real Estate Services was paying out a very large proportion of what it was earning and 115% of cash flows. Paying out such a high proportion of cash flows certainly exposes the company to cutting the dividend if cash flows were to reduce.

EPS is set to fall by 4.9% over the next 12 months if recent trends continue. If recent patterns in the dividend continue, we could see the payout ratio reaching 84% in the next 12 months which is on the higher end of the range we would say is sustainable.

Bridgemarq Real Estate Services Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of CA$1.1 in 2014 to the most recent total annual payment of CA$1.35. This works out to be a compound annual growth rate (CAGR) of approximately 2.0% a year over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend's Growth Prospects Are Limited

The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. In the last five years, Bridgemarq Real Estate Services' earnings per share has shrunk at approximately 4.9% per annum. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

We should note that Bridgemarq Real Estate Services has issued stock equal to 23% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

Bridgemarq Real Estate Services' Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Bridgemarq Real Estate Services' payments, as there could be some issues with sustaining them into the future. Although they have been consistent in the past, we think the payments are a little high to be sustained. Overall, we don't think this company has the makings of a good income stock.