Taylor Maritime Investments (LON:TMI) Has Affirmed Its Dividend Of $0.02

The board of Taylor Maritime Investments Limited (LON:TMI) has announced that it will pay a dividend on the 29th of February, with investors receiving $0.02 per share. The dividend yield will be 9.4% based on this payment which is still above the industry average.

Check out our latest analysis for Taylor Maritime Investments

Taylor Maritime Investments' Distributions May Be Difficult To Sustain

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This is quite a strong warning sign that the dividend may not be sustainable.

Over the next year, EPS might fall by 177.0% based on recent performance. This means the company will be unprofitable and managers could face the tough choice between continuing to pay the dividend or taking pressure off the balance sheet.

Taylor Maritime Investments 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 dividend has gone from an annual total of $0.07 in 2022 to the most recent total annual payment of $0.08. This works out to be a compound annual growth rate (CAGR) of approximately 6.9% a year over that time. Taylor Maritime Investments has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.

The Dividend Has Limited Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Let's not jump to conclusions as things might not be as good as they appear on the surface. EPS has fallen over the last year, with this year's number 177% below last year. Such a large drop can indicate that the business has run into some trouble and might end up in the dividend having to be reduced. However, we would never make any decisions based on only a single year of data, especially when assessing long term dividend potential.

Taylor Maritime Investments' Dividend Doesn't Look Great

Overall, while some might be pleased that the dividend wasn't cut, we think this may help Taylor Maritime Investments 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. We don't think that this is a great candidate to be an income stock.

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. Just as an example, we've come across 4 warning signs for Taylor Maritime Investments you should be aware of, and 3 of them can't be ignored. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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