It looks like Marwest Apartment Real Estate Investment Trust (CVE:MAR.UN) is about to go ex-dividend in the next 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase Marwest Apartment Real Estate Investment Trust's shares on or after the 28th of June, you won't be eligible to receive the dividend, when it is paid on the 15th of July.
The company's next dividend payment will be CA$0.0013 per share. Last year, in total, the company distributed CA$0.015 to shareholders. Based on the last year's worth of payments, Marwest Apartment Real Estate Investment Trust has a trailing yield of 1.7% on the current stock price of CA$0.90. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Marwest Apartment Real Estate Investment Trust paid out just 2.2% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why we're optimistic about Marwest Apartment Real Estate Investment Trust's earnings, which have ripped higher, up 29% over the past year. While we'd be remiss not to point out that a year is a very short time in dividend investing, it's an encouraging sign so far.
One year is a very short time frame in the pantheon of investing, so we wouldn't get too hung up on these numbers.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past three years, Marwest Apartment Real Estate Investment Trust has increased its dividend at approximately 0.7% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
To Sum It Up
Has Marwest Apartment Real Estate Investment Trust got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. We think this is a pretty attractive combination, and would be interested in investigating Marwest Apartment Real Estate Investment Trust more closely.
So while Marwest Apartment Real Estate Investment Trust looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Our analysis shows 3 warning signs for Marwest Apartment Real Estate Investment Trust that we strongly recommend you have a look at before investing in the company.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
