There's A Lot To Like About T.T's (NSE:TTL) Upcoming ₹0.05 Dividend

It looks like T.T. Limited (NSE:TTL) is about to go ex-dividend in the next three days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase T.T's shares before the 17th of September in order to receive the dividend, which the company will pay on the 24th of October.

The company's upcoming dividend is ₹0.05 a share, following on from the last 12 months, when the company distributed a total of ₹0.05 per share to shareholders. Based on the last year's worth of payments, T.T has a trailing yield of 0.5% on the current stock price of ₹10.62. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether T.T can afford its dividend, and if the dividend could grow.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see T.T paying out a modest 27% of its earnings. T.T paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.

Check out our latest analysis for T.T

Click here to see how much of its profit T.T paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. T.T reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. T.T's dividend payments per share have declined at 6.7% per year on average over the past 10 years, which is uninspiring.

Remember, you can always get a snapshot of T.T's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

Is T.T an attractive dividend stock, or better left on the shelf? In summary, T.T appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

On that note, you'll want to research what risks T.T is facing. For example - T.T has 3 warning signs we think you should be aware of.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.