Tricon Residential (TSE:TCN) Has Re-Affirmed Its Dividend Of CA$0.07

Tricon Residential Inc.'s (TSE:TCN) investors are due to receive a payment of CA$0.07 per share on 15th of July. This makes the dividend yield 2.2%, which will augment investor returns quite nicely.

View our latest analysis for Tricon Residential

Tricon Residential's Earnings Easily Cover the Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Tricon Residential's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

EPS is set to fall by 61.1% over the next 12 months. Assuming the dividend continues along recent trends, we believe the payout ratio could be 70%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Dividend Volatility

The company's dividend history has been marked by instability, with at least 1 cut in the last 10 years. The dividend has gone from US$0.23 in 2011 to the most recent annual payment of US$0.23. Dividend payments have been growing, but very slowly over the period. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.

Tricon Residential Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Tricon Residential has impressed us by growing EPS at 5.1% per year over the past five years. Tricon Residential definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

In Summary

Overall, a consistent dividend is a good thing, and we think that Tricon Residential has the ability to continue this into the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 5 warning signs for Tricon Residential (of which 2 can't be ignored!) you should know about. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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