Taylor Maritime Investments (LON:TMI) Will Pay A Dividend Of $0.02

The board of Taylor Maritime Investments Limited (LON:TMI) has announced that it will pay a dividend of $0.02 per share on the 30th of August. This means the annual payment is 7.6% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Taylor Maritime Investments

Taylor Maritime Investments Might Find It Hard To Continue The Dividend

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Taylor Maritime Investments is unprofitable despite paying a dividend, and it is paying out 121% of its free cash flow. This makes us feel that the dividend will be hard to maintain.

Over the next year, EPS could fall pretty quickly unless something improves in the business. This could force the company to make difficult decisions around continuing payouts to shareholders or putting additional pressure on the balance sheet.

Taylor Maritime Investments Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The dividend has gone from an annual total of $0.07 in 2021 to the most recent total annual payment of $0.08. This works out to be a compound annual growth rate (CAGR) of approximately 4.6% a year over that time. 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 Has Limited Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Let's not jump to conclusions as things might not be as good as they appear on the surface. Taylor Maritime Investments' earnings per share has fallen 306% over the past year. A large drop like this could indicate a major challenge in the business, and could certainly flow through to reduced dividend payments. We do note though, one year is too short a time to be drawing strong conclusions about a company's future prospects.

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. Overall, this doesn't get us very excited from an income standpoint.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 3 warning signs for Taylor Maritime Investments that investors should take into consideration. Is Taylor Maritime Investments not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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