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
ZGLZicom GrpCapital Goods 0.350.0%2.59%13.5-2.74-7.83x
RVLRussell Aust Value132.37818.7%0%301200.00x
RSMRussell Au Semi Bond36.7312-0.0%0%204800.00x
RGBRussell Au Govt Bnd55.4199-0.0%0%209400.00x
RDVRussell High Div115.50127.5%0%299800.00x
RCBRussell Au Sel Corp Bnd66.518-2.0%0%202500.00x
PRYPrimary Health CareHealth Care Equipment & Services 10.6-82.4%2.92%363-99.1-9.35x
PRTPrime Media GrpMedia 3.4100.0%6.94%49-25.1-7.38x
PNWPacific Star NetMedia 1.65100.0%7.17%23-5.4-3.27x
MCPMcPhersonsConsumer Durables & Apparel 8100.0%5.82%137.5-10.7-1.34x
SGMSims Metal MgmtMaterials 32100.0%2.26%1417-81.4-2.54x
SMXSMS ManagementSoftware & Services 4.5100.0%2.53%178-61.19-13.60x
VTSVngd US Total Market206.8382.5%0%1580700.00x
VLCVngd MSCI Au Large Co152.00917.4%0%604500.00x
VHYVngd Aust High Yield335.8984.9%0%613900.00x
VGBVngd Aust Govt Bond64.5009-5.0%0%492000.00x
VEUVngd All-World ex-US102.4013.9%0%650000.00x
VAPVngd Aust Property155.022-0.9%0%786700.00x
URFUS Masters Res PropReal Estate 50.0%5.68%176-14.7-2.94x
TAHTabcorp HldgsConsumer Services 25-66.7%5.85%427-2.5-0.10x
SWMSeven West MediaMedia 4-66.7%5.19%77-49.4-12.35x
KSCK & STransportation 1.5100.0%0.86%175-10.3-6.87x
KOVKorvestCapital Goods 1323.1%5.63%231-14.4-1.11x
CABCabcharge AustCommercial & Professional Services 100100.0%9.3%215-87.6-0.88x
AZJAurizon HldgsTransportation 8.9-233.3%4.35%517-9.2-1.03x
AWCAluminaMaterials 4.036299.5%3.85%205-1.38-0.34x
AUPAurora PropNot Applic 42.760.0%9.94%43000.00x
AUFAsian Masters FundDiversified Financials 6.1100.0%1.57%140-1.11-0.18x
AODAurora Div Inc TrNot Applic 1.33-28.1%8.67%61.5-1.6-1.20x
AMPAMPInsurance 28.5-74.5%5.56%513-14.3-0.50x
AIBAurora Global Inc TrDiversified Financials 6.140.0%14.8%41.5-3.08-0.50x
ABWAurora Absolute RetNot Applic 3.340.0%8.35%40-8.61-2.58x
DCGDecmil GrpCapital Goods 4100.0%4.21%95-2.7-0.68x
FRIFinbar GrpReal Estate 6-66.7%7.45%80.5-0.4-0.07x
IZZiShares China LCapNot Applic 97.32267.2%1.82%5336-198.99-2.04x
IVEiShares MSCI EAFENot Applic 185.2933.9%2.2%8375-1875.33-10.12x
IPEIPEDiversified Financials 3.464.7%30.91%11-1.35-0.40x
ILUIluka ResMaterials 9-122.2%0.97%926-67.9-7.54x
IJPiShares MSCI JapanNot Applic 104.2246.8%1.51%6886-361.2-3.47x
IHKiShares MSCI HKNot Applic 68.13223.7%2.22%3054-224.84-3.30x
IEMiShares MSCI Em MktNot Applic 65.7737.3%1.19%5524-1950.25-29.65x
GUDGUD HldgsConsumer Durables & Apparel 69-20.8%3.81%1206-8.57-0.12x
GCSGlobal ConstructCapital Goods 1100.0%3.64%55-38.9-38.90x
AADArdent Leisure GrpConsumer Services 30.0%1.48%203-6.28-2.09x
VASVngd Aust Shares192.09512.5%4.01%73431.770.01x
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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.