Income Investors Should Know That Titanium Transportation Group Inc. (TSE:TTNM) Goes Ex-Dividend Soon

It looks like Titanium Transportation Group Inc. (TSE:TTNM) is about to go ex-dividend in the next 2 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase Titanium Transportation Group's shares on or after the 30th of May will not receive the dividend, which will be paid on the 15th of June.

The company's next dividend payment will be CA$0.02 per share. Last year, in total, the company distributed CA$0.08 to shareholders. Based on the last year's worth of payments, Titanium Transportation Group has a trailing yield of 3.1% on the current stock price of CA$2.55. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Titanium Transportation Group can afford its dividend, and if the dividend could grow.

See our latest analysis for Titanium Transportation Group

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Titanium Transportation Group has a low and conservative payout ratio of just 16% of its income after tax. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Titanium Transportation Group paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see Titanium Transportation Group's earnings have been skyrocketing, up 51% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. It looks like the Titanium Transportation Group dividends are largely the same as they were two years ago.

To Sum It Up

Should investors buy Titanium Transportation Group for the upcoming dividend? We're glad to see the company has been improving its earnings per share while also paying out a low percentage of income. However, it's not great to see it paying out what we see as an uncomfortably high percentage of its cash flow. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Titanium Transportation Group's dividend merits.

In light of that, while Titanium Transportation Group has an appealing dividend, it's worth knowing the risks involved with this stock. We've identified 5 warning signs with Titanium Transportation Group (at least 2 which are potentially serious), and understanding them should be part of your investment process.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.