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The board of Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) has announced that it will pay a dividend on the 16th of September, with investors receiving CA$0.0013 per share. This payment means that the dividend yield will be 1.8%, which is around the industry average.
Check out our latest analysis for Marwest Apartment Real Estate Investment Trust
Marwest Apartment Real Estate Investment Trust's Earnings Easily Cover The Distributions
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Before making this announcement, Marwest Apartment Real Estate Investment Trust was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.
Over the next year, EPS could expand by 27.2% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 1.9%, which is in the range that makes us comfortable with the sustainability of the dividend.
Marwest Apartment Real Estate Investment Trust 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 annual payment during the last 3 years was CA$0.015 in 2021, and the most recent fiscal year payment was CA$0.0156. This works out to be a compound annual growth rate (CAGR) of approximately 1.3% a year over that time. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings have grown by 27% in the last year. Rising earnings will make it easier for the company to keep paying dividends, and possibly even increase them. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend. However, we would never make any decisions based on only a single year of data, especially when assessing long term dividend potential.
We Really Like Marwest Apartment Real Estate Investment Trust's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.