Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Bridgemarq Real Estate Services Inc. (TSE:BRE) is about to go ex-dividend in just four days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, Bridgemarq Real Estate Services investors that purchase the stock on or after the 31st of May will not receive the dividend, which will be paid on the 28th of June.

The company's next dividend payment will be CA$0.1125 per share, and in the last 12 months, the company paid a total of CA$1.35 per share. Calculating the last year's worth of payments shows that Bridgemarq Real Estate Services has a trailing yield of 9.9% on the current share price of CA$13.61. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Bridgemarq Real Estate Services can afford its dividend, and if the dividend could grow.

View our latest analysis for Bridgemarq Real Estate Services

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Bridgemarq Real Estate Services distributed an unsustainably high 190% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Over the past year it paid out 110% of its free cash flow as dividends, which is uncomfortably high. It's hard to consistently pay out more cash than you generate without either borrowing or using company cash, so we'd wonder how the company justifies this payout level.

Cash is slightly more important than profit from a dividend perspective, but given Bridgemarq Real Estate Services's payouts were not well covered by either earnings or cash flow, we would be concerned about the sustainability of this dividend.

Click here to see how much of its profit Bridgemarq Real Estate Services paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by Bridgemarq Real Estate Services's 17% per annum decline in earnings in the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.