Taylor Maritime (LON:TMI) Is Due To Pay A Dividend Of $0.02

The board of Taylor Maritime Limited (LON:TMI) has announced that it will pay a dividend on the 29th of August, with investors receiving $0.02 per share. This means the annual payment will be 9.3% of the current stock price, which is lower than the industry average.

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Taylor Maritime's Distributions May Be Difficult To Sustain

Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, Taylor Maritime was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

EPS has fallen by an average of 90.9% in the past, so this could continue over the next year. This means that the company won't turn a profit over the next year, but with healthy cash flows at the moment the dividend could still be okay to continue.

See our latest analysis for Taylor Maritime

Taylor Maritime 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 4 years, which isn't that long in the grand scheme of things. Since 2021, the annual payment back then was $0.07, compared to the most recent full-year payment of $0.08. This works out to be a compound annual growth rate (CAGR) of approximately 3.4% a year over that time. Taylor Maritime 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Unfortunately things aren't as good as they seem. Taylor Maritime's EPS has fallen by approximately 91% per year during the past three years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

Our Thoughts On Taylor Maritime's Dividend

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. Overall, we don't think this company has the makings of a good 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. For example, we've identified 3 warning signs for Taylor Maritime (2 are a bit unpleasant!) that you should be aware of before investing. Is Taylor Maritime not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.