Westshore Terminals Investment (TSE:WTE) Has Announced A Dividend Of CA$0.375

Westshore Terminals Investment Corporation (TSE:WTE) has announced that it will pay a dividend of CA$0.375 per share on the 15th of July. The dividend yield will be 6.7% based on this payment which is still above the industry average.

We've discovered 1 warning sign about Westshore Terminals Investment. View them for free.

Westshore Terminals Investment's Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Westshore Terminals Investment's dividend made up quite a large proportion of earnings but only 72% of free cash flows. This leaves plenty of cash for reinvestment into the business.

EPS is set to fall by 6.5% over the next 12 months. If recent patterns in the dividend continue, we could see the payout ratio reaching 92% in the next 12 months, which is on the higher end of the range we would say is sustainable.

View our latest analysis for Westshore Terminals Investment

Westshore Terminals Investment Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was CA$1.32 in 2015, and the most recent fiscal year payment was CA$1.50. This works out to be a compound annual growth rate (CAGR) of approximately 1.3% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

Westshore Terminals Investment May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. It's not great to see that Westshore Terminals Investment's earnings per share has fallen at approximately 3.2% per year over the past five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.

Our Thoughts On Westshore Terminals Investment's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company has been bring in plenty of cash to cover the dividend, but we don't necessarily think that makes it a great dividend stock. We would probably look elsewhere for an income investment.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Westshore Terminals Investment that investors need to be conscious of moving forward. Is Westshore Terminals Investment not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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