TotalEnergies (EPA:TTE) Is Paying Out A Larger Dividend Than Last Year

The board of TotalEnergies SE (EPA:TTE) has announced that it will be paying its dividend of $0.85 on the 1st of July, an increased payment from last year's comparable dividend. Based on this payment, the dividend yield for the company will be 6.0%, which is fairly typical for the industry.

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TotalEnergies' Projected Earnings Seem Likely To Cover Future Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. The last dividend was quite easily covered by TotalEnergies' earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Over the next year, EPS is forecast to expand by 21.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 38% by next year, which is in a pretty sustainable range.

Check out our latest analysis for TotalEnergies

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of $3.26 in 2015 to the most recent total annual payment of $3.5. Dividend payments have grown at less than 1% a year over this period. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that TotalEnergies has grown earnings per share at 10% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

TotalEnergies Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that TotalEnergies is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for TotalEnergies that you should be aware of before investing. Is TotalEnergies not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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