Marcus & Millichap (NYSE:MMI) Is Due To Pay A Dividend Of $0.25

Marcus & Millichap, Inc. (NYSE:MMI) will pay a dividend of $0.25 on the 5th of April. This means the annual payment will be 1.4% of the current stock price, which is lower than the industry average.

View our latest analysis for Marcus & Millichap

Marcus & Millichap's Distributions May Be Difficult To Sustain

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Even in the absence of profits, Marcus & Millichap is paying a dividend. It is also not generating any free cash flow, we definitely have concerns when it comes to the sustainability of the dividend.

Recent, EPS has fallen by 7.6%, so this could continue over the next year. This means the company will be unprofitable and managers could face the tough choice between continuing to pay the dividend or taking pressure off the balance sheet.

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Marcus & Millichap 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 2 years, which isn't that long in the grand scheme of things. The last annual payment of $0.50 was flat on the annual payment from2 years ago. 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.

Dividend Growth May Be Hard To Come By

The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. In the last five years, Marcus & Millichap's earnings per share has shrunk at approximately 7.6% per annum. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.

Marcus & Millichap's Dividend Doesn't Look Great

Overall, while some might be pleased that the dividend wasn't cut, we think this may help Marcus & Millichap make more consistent payments in the future. The company seems to be stretching itself a bit to make such big payments, but it doesn't appear they can be consistent over time. Overall, this doesn't get us very excited from an income standpoint.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Marcus & Millichap that investors need to be conscious of moving forward. Is Marcus & Millichap not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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