Unsustainable Dividend Shares

These are companies that payout an unsustainable dividend. That is, the current annual dividend payment is greater than the reported earnings per share. In many cases this will be a once off event due to a poor earnings year caused by an unforeseen event and earnings will recover next year, but it is prudent to investigate why your investments candidates are paying out more in dividends than they are earning.

Here is a checklist of factors that may make a companies dividend unsustainable:

  • High Payout Ratio – can future dividends be met by earnings? Does the company retain enough earnings for reinvestment and maintenance of key income producing assets.
  • High Debt to Equity Ratio – is the company able to meet interest payments and still be sufficiently profitable to pay dividends?
  • Earnings trend and Guidance – is the direction and quality of earnings, and the future guidance of earnings consistent sufficient to maintain dividend payments?

The following is a list of dividend paying companies that have recently reported negative earnings or where the dividend is greater than earnings.



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Stock Company Sector Dividend
(cents)
Franking Yield Price
(cents)
Earnings
per Share
(cents)
Dividend
Cover
Star Rating
AADArdent Leisure Grp8.5-178.4%4.62%184-19.32-2.27x
MTSMetcash13-79.5%4.71%276-15.3-1.18x
NVTNavitas17.4-53.3%3.9%446-15.6-0.90x
ORIOrica51.5-233.3%2.73%1759-10-0.19x
PFGPrime Financial0.9-66.7%7.83%11.5-0.06-0.07x
PPGPro-Pac Packaging2-66.7%8.33%24-1.15-0.58x
QBEQBE Insurance Grp26-192.8%2.36%1101-114.14-4.39x
RCBRussell Au Sel Corp Bnd44.53-140.9%0%202000.00x
RDVRussell High Div161.15-174.1%0%298700.00x
RGBRussell Au Govt Bnd26.41-155.1%0%211000.00x
RSMRussell Au Semi Bond29.02-150.3%0%206100.00x
SKTSky Network TV13.82-115.8%6.96%199-56.79-4.11x
VAPVngd Aust Property85.18-233.3%0%825100.00x
VEUVngd All-World ex-US102.44-233.3%0%722000.00x
VGBVngd Aust Govt Bond54.08-233.3%0%494000.00x
VHYVngd Aust High Yield414.043-233.3%0%598200.00x
VLCVngd MSCI Au Large Co219.81-233.3%0%649500.00x
MAMMicroequities1-233.3%0%6000.00x
IZZiShares China LCap168-95.8%2.79%5862-198.99-1.18x
IVEiShares MSCI EAFE236.85-152.1%2.5%9368-1875.33-7.92x
ABWAurora Absolute Ret1.83-62.5%6.3%37-15.73-8.60x
AIBAurora Global Inc Tr2.72-30.9%19.15%20-15.25-5.61x
ALFAust Leaders Fund2-233.3%1.88%106.5-2.53-1.27x
AODAurora Div Inc Tr1.14-233.3%6.58%57-0.81-0.71x
APZAspen Grp4.2-116.7%4.29%98-1.27-0.30x
AUPAurora Prop25.11-69.5%13.47%23000.00x
CABCabcharge Aust8-66.7%3.49%229-1.84-0.23x
CAJCapitol Health0.8-66.7%2.86%28-1.36-1.70x
CGOCPT Global0.25-233.3%1.28%19.5-3.03-12.12x
CUPCountplus1-233.3%1.5%66.5-0.16-0.16x
EPWERM Power7.5-77.8%4.97%151-32.86-4.38x
FXJFairfax Media2.9-106.9%3.3%88-2.8-0.97x
FXLFlexiGroup7.7-66.7%3.45%223-2.8-0.36x
IEMiShares MSCI Em Mkt110.38-69.9%1.81%5933-1950.25-17.67x
IJPiShares MSCI Japan96.86-126.5%1.18%8056-361.2-3.73x
IPCImperial Pacific6.25-233.3%5.48%114-4.83-0.77x
VTSVngd US Total Market206.35-78.4%0%2067400.00x
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Disclaimer
The information provided on this website is for use of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific professional or investment advice. The team at Dividends.com.au are not lawyers, financial planners, investment advisers, or accountants. So, before taking any action or risking any money, you should always check with your own qualified professional advisers.