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Marwest Apartment Real Estate Investment Trust's (CVE:MAR.UN) investors are due to receive a payment of CA$0.0013 per share on 15th of April. The dividend yield will be 2.2% based on this payment which is still above the industry average.
See our latest analysis for Marwest Apartment Real Estate Investment Trust
Marwest Apartment Real Estate Investment Trust's Payment Could Potentially Have Solid Earnings Coverage
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, prior to this announcement, Marwest Apartment Real Estate Investment Trust's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
Looking forward, EPS could fall by 4.1% if the company can't turn things around from the last few years. Assuming the dividend continues along recent trends, we believe the payout ratio could be 1.8%, which we are pretty comfortable with and we think is feasible on an earnings basis.
Marwest Apartment Real Estate Investment Trust Is Still Building Its Track Record
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. Since 2022, the dividend has gone from CA$0.015 total annually to CA$0.0156. This means that it has been growing its distributions at 1.3% per annum 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.
Marwest Apartment Real Estate Investment Trust May Find It Hard To Grow The Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, initial appearances might be deceiving. It's not great to see that Marwest Apartment Real Estate Investment Trust's earnings per share has fallen at approximately 4.1% per year over the past three years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed.
In Summary
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. This company is not in the top tier of income providing stocks.