Yahoo Finance Sienna Senior Living (TSE:SIA) Has Affirmed Its Dividend Of CA$0.078
The board of Sienna Senior Living Inc. (TSE:SIA) has announced that it will pay a dividend on the 15th of January, with investors receiving CA$0.078 per share. This means the annual payment is 8.3% of the current stock price, which is above the average for the industry.
See our latest analysis for Sienna Senior Living
Sienna Senior Living Might Find It Hard To Continue The Dividend
A big dividend yield for a few years doesn't mean much if it can't be sustained. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This is quite a strong warning sign that the dividend may not be sustainable.
Looking forward, earnings per share could rise by 0.2% over the next year if the trend from the last few years continues. The company seems to be going down the right path, but it will probably take a little bit longer than a year to cross over into profitability. Unless this can be done in short order, the dividend might be difficult to sustain.
Sienna Senior Living Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was CA$0.90, compared to the most recent full-year payment of CA$0.936. Dividend payments have been growing, but very slowly over the period. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
Dividend Growth May Be Hard To Achieve
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Although it's important to note that Sienna Senior Living's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. With EPS growth hard to come by and the company not turning a profit, we wouldn't be particularly optimistic about the growth prospects for Sienna Senior Living's dividend in the future.
Sienna Senior Living's Dividend Doesn't Look Sustainable
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We don't think Sienna Senior Living is a great stock to add to your portfolio if income is your focus.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 2 warning signs for Sienna Senior Living that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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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.
