Triple Point Energy Transition (LON:TENT) Has Affirmed Its Dividend Of £0.0138

Triple Point Energy Transition plc (LON:TENT) will pay a dividend of £0.0138 on the 29th of September. This means the annual payment is 8.9% of the current stock price, which is above the average for the industry.

View our latest analysis for Triple Point Energy Transition

Triple Point Energy Transition'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. The last payment was quite easily covered by earnings, but it made up 162% of cash flows. The company might be more focused on returning cash to shareholders, but paying out this much of its cash flow could expose the dividend to being cut in the future.

Over the next year, EPS could expand by 85.1% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 34% by next year, which is in a pretty sustainable range.

Triple Point Energy Transition Doesn't Have A Long Payment History

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The payments haven't really changed that much since 2 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Triple Point Energy Transition will be very happy to have seen its EPS grow by 85% in just the last 12 months. We always like to see numbers like these going up, but we don't expect them to shoot up forever, especially as the company grows. Triple Point Energy Transition is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future. We do note though, one year is too short a time to be drawing strong conclusions about a company's future prospects.

Our Thoughts On Triple Point Energy Transition's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Triple Point Energy Transition is earning enough to cover the payments, the cash flows are lacking. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Triple Point Energy Transition that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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