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

Taylor Maritime Investments Limited (LON:TMI) has announced that it will pay a dividend of $0.02 per share on the 29th of November. This means the annual payment is 7.9% 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' Distributions May Be Difficult To Sustain

If the payments aren't sustainable, a high yield for a few years won't matter that much. 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.

EPS could fall quite dramatically over the next 12 months if recent trends continue. 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

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2021, the annual payment back then was $0.07, compared to the most recent full-year payment of $0.08. This implies that the company grew its distributions at a yearly rate of about 4.6% over that duration. Taylor Maritime Investments hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

The Dividend Has Limited Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. 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.

We're Not Big Fans Of Taylor Maritime Investments' Dividend

Overall, this isn't a great candidate as an income investment, even though the dividend was stable this year. The company seems to be stretching itself a bit to make such big payments, but it doesn't appear they can be consistent over time. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 3 warning signs for Taylor Maritime Investments that investors need to be conscious of moving forward. 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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