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Dividend Buyers: Do not Be Too Fast To Purchase Sienna Senior Residing Inc. (TSE:SIA) For Its Upcoming Dividend

Share this…FacebookPinterestTwitterLinkedin Common readers will know that we love our dividends at Merely Wall St, which is why it is…

By Staff , in Senior Living , at May 23, 2021

Common readers will know that we love our dividends at Merely Wall St, which is why it is thrilling to see Sienna Senior Residing Inc. (TSE:SIA) is about to commerce ex-dividend within the subsequent 4 days. The ex-dividend date happens in the future earlier than the document date which is the day on which shareholders should be on the corporate’s books with a purpose to obtain a dividend. The ex-dividend date is of consequence as a result of each time a inventory is purchased or offered, the commerce takes a minimum of two enterprise day to settle. Accordingly, Sienna Senior Residing traders that buy the inventory on or after the twenty eighth of Could won’t obtain the dividend, which can be paid on the fifteenth of June.

The corporate’s upcoming dividend is CA$0.078 a share, following on from the final 12 months, when the corporate distributed a complete of CA$0.94 per share to shareholders. Final yr’s whole dividend funds present that Sienna Senior Residing has a trailing yield of 5.8% on the present share worth of CA$16.07. Dividends are an vital supply of earnings to many shareholders, however the well being of the enterprise is essential to sustaining these dividends. So we have to examine whether or not Sienna Senior Residing can afford its dividend, and if the dividend may develop.

Take a look at our newest evaluation for Sienna Senior Residing

Dividends are often paid out of firm earnings, so if an organization pays out greater than it earned then its dividend is often at better danger of being minimize. Sienna Senior Residing paid a dividend final yr regardless of being unprofitable. This may be a one-off occasion, nevertheless it’s not a sustainable state of affairs in the long term. With the current loss, it is vital to test if the enterprise generated sufficient money to pay its dividend. If money earnings do not cowl the dividend, the corporate must pay dividends out of money within the financial institution, or by borrowing cash, neither of which is long-term sustainable. Over the previous yr it paid out 138% of its free money move as dividends, which is uncomfortably excessive. We’re interested in why the corporate paid out more money than it generated final yr, since this may be one of many early indicators {that a} dividend could also be unsustainable.

Click on right here to see the corporate’s payout ratio, plus analyst estimates of its future dividends.

TSX:SIA Historic Dividend Could twenty third 2021

Have Earnings And Dividends Been Rising?

Corporations with falling earnings are riskier for dividend shareholders. If earnings fall far sufficient, the corporate might be compelled to chop its dividend. Sienna Senior Residing was unprofitable final yr and, sadly, the overall pattern suggests its earnings have been in decline during the last 5 years, making us marvel if the dividend is sustainable in any respect.

Many traders will assess an organization’s dividend efficiency by evaluating how a lot the dividend funds have modified over time. Sienna Senior Residing has delivered 1.0% dividend development per yr on common over the previous 10 years.

Keep in mind, you may at all times get a snapshot of Sienna Senior Residing’s monetary well being, by checking our visualisation of its monetary well being, right here.

Closing Takeaway

Is Sienna Senior Residing value shopping for for its dividend? We’re a bit uncomfortable with it paying a dividend whereas being loss-making, particularly provided that the dividend was not nicely lined by free money move. It is not probably the most enticing proposition from a dividend perspective, and we would most likely give this one a miss for now.

With that being stated, in the event you’re nonetheless contemplating Sienna Senior Residing as an funding, you may discover it useful to know what dangers this inventory is dealing with. To that finish, you need to be taught concerning the 4 warning indicators we have noticed with Sienna Senior Residing (together with 2 which should not be ignored).

We would not advocate simply shopping for the primary dividend inventory you see, although. Here is an inventory of fascinating dividend shares with a better than 2% yield and an upcoming dividend.

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This text by Merely Wall St is basic in nature. It doesn’t represent a advice to purchase or promote any inventory, and doesn’t take account of your aims, or your monetary state of affairs. We intention to carry you long-term targeted evaluation pushed by elementary knowledge. Be aware that our evaluation could not issue within the newest price-sensitive firm bulletins or qualitative materials. Merely Wall St has no place in any shares talked about.
*Interactive Brokers Rated Lowest Value Dealer by Annual On-line Evaluation 2020

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