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Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) has announced that it will pay a dividend of CA$0.0013 per share on the 15th of August. This makes the dividend yield about the same as the industry average at 1.9%.
See our latest analysis for Marwest Apartment Real Estate Investment Trust
Marwest Apartment Real Estate Investment Trust's Earnings Easily Cover The Distributions
Unless the payments are sustainable, the dividend yield doesn't mean too much. 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 its earnings are being retained to grow the business.
Looking forward, earnings per share could rise by 28.7% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 1.8%, which is in the range that makes us comfortable with the sustainability of the dividend.
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 2021, the annual payment back then was CA$0.015, compared to the most recent full-year payment of CA$0.0156. This means that it has been growing its distributions at 1.3% per annum over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings have grown by 29% in the last year. We always like to see growing earnings, and if the trend continues it would be a very positive sign for the dividend potential. 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. Any one year of performance can be misleading for a variety of reasons, so we wouldn't like to form any strong conclusions based on these numbers alone.
Marwest Apartment Real Estate Investment Trust Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.