This is why we are wary of buying Bridgemarq Real Estate Services (TSE: BRE) due to upcoming dividends

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Readers hope to buy Bridgemarq Real Estate Services Inc. (TSE: BRE) to receive dividends, you will need to make your move in the near future, since the shares are going to trade without dividends. The ex-dividend date is one business day before the filing date, which is the deadline for shareholders to be present on the company’s books to be eligible for dividend payments. The ex-dividend date is important because whenever a stock is bought or sold, the transaction takes at least two business days to close. Accordingly, investors in Bridgemarq Real Estate Services who purchase shares on or after July 29th will not receive the dividends that will be paid on August 31st.

The company’s next dividend payout will be C $ 0.11 per share compared to last year, when the company paid out a total of C $ 1.35 to shareholders. Last year’s payout tally shows Bridgemarq Real Estate Services yield 8.1% at a current share price of CAD 16.61. We love seeing companies pay dividends, but it’s also important to make sure that a clutch of golden eggs doesn’t kill our golden goose! We need to see if dividends are covered by profits and if they grow.

Check out our latest analysis of Bridgemarq real estate services

Dividends are usually paid out of the company’s profits, so if the company pays out more than it earned, its dividend is usually at greater risk of being cut. Bridgemarq Real Estate Services lost money last year, so the fact that it pays dividends is definitely confusing. There might be a good reason for this, but we’d like to explore it in more detail before we feel comfortable. Given the lack of profitability, we also need to check if the company generates enough cash flow to pay dividends. If Bridgemarq Real Estate Services did not raise enough money to pay dividends, then it had to be paid either in cash from the bank or by borrowing money, neither is sustainable in the long run. Over the past year, 66% of free cash flow has been paid in the form of dividends, which is in the usual range for most companies.

Click on here to see how much of its profits Bridgemarq Real Estate Services has paid in the last 12 months.

historical dividend

historical dividend

Are incomes and dividends growing?

Companies that don’t increase their profits can be valuable, but it’s even more important to assess the sustainability of dividends if the company looks like it will struggle to grow. If the business goes into recession and dividends are cut, the company’s value could plummet. Bridgemarq Real Estate Services reported a loss last year and the overall trend suggests that its earnings have also declined in recent years, which makes us wonder if dividends are at risk.

Many investors will evaluate a company’s dividend performance by assessing how much the dividend payout has changed over time. It looks like Bridgemarq Real Estate Services’ dividend is basically the same as it was 10 years ago.

Receive Our latest analysis of Bridgemarq Real Estate Services’ balance sheet is here.

Summarize

Should investors buy Bridgemarq Real Estate Services for the upcoming dividends? We are a little uncomfortable that he pays dividends, being unprofitable. However, we note that the dividends were covered by cash flow. Bottom Line: Bridgemarq Real Estate Services has some unfortunate characteristics that we believe could lead to suboptimal results for dividend investor investors.

With this in mind, if Bridgemarq Real Estate Services’ poor dividend performance does not bother you, it is worth keeping in mind the risks associated with this business. For example, we have defined 4 warning signs for Bridgemarq Real Estate Services (3 are significant) you should be aware of this.

If you want to buy dividend stocks, we recommend checking out our list of the best dividend stocks with yields over 2% and dividends to come.

This article by Simply Wall St is general in nature. It is not a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not include the latest announcements from price-sensitive companies or quality content. Simply Wall St has no position in any of the mentioned promotions.

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