Triple Point Energy Transition (LON:TENT) Has Affirmed Its Dividend Of £0.0137

Triple Point Energy Transition plc (LON:TENT) will pay a dividend of £0.0137 on the 5th of April. Based on this payment, the dividend yield on the company's stock will be 8.5%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Triple Point Energy Transition

Triple Point Energy Transition Is Paying Out More Than It Is Earning

If the payments aren't sustainable, a high yield for a few years won't matter that much. Prior to this announcement, the company was paying out 1,652% of what it was earning. Without profits and cash flows increasing, it would be difficult for the company to continue paying the dividend at this level.

If the company can't turn things around, EPS could fall by 97.0% over the next year. If the dividend continues along the path it has been on recently, the payout ratio in 12 months could be 55,858%, which is definitely a bit high to be sustainable going forward.

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

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. The last annual payment of £0.055 was flat on the annual payment from3 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.

Dividend Growth Potential Is Shaky

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. Triple Point Energy Transition has seen EPS fall by 97% over the last 12 months. Decreases in earnings as large as this could start to put some pressure on the dividend if they are sustained for several years. Any one year of performance can be misleading for a variety of reasons, so we wouldn't like to form any strong conclusions based on these numbers alone.

Triple Point Energy Transition's Dividend Doesn't Look Great

Overall, while some might be pleased that the dividend wasn't cut, we think this may help Triple Point Energy Transition make more consistent payments in the future. The company isn't making enough to be paying as much as it is, and the other factors don't look particularly promising either. Overall, this doesn't get us very excited from an income standpoint.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Triple Point Energy Transition has 5 warning signs (and 2 which are a bit unpleasant) we think you should know about. 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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