Tigné Mall (MTSE:TML) Will Pay A Larger Dividend Than Last Year At €1.45

The board of Tigné Mall p.l.c. (MTSE:TML) has announced that the dividend on 17th of July will be increased to €1.45, which will be 10,525% higher than last year's payment of €0.0136 which covered the same period. Although the dividend is now higher, the yield is only 3.3%, which is below the industry average.

Check out our latest analysis for Tigné Mall

Tigné Mall Doesn't Earn Enough To Cover Its Payments

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Before making this announcement, Tigné Mall was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Earnings per share could rise by 9.9% over the next year if things go the same way as they have for the last few years. If the dividend continues on its recent course, the payout ratio in 12 months could be 1,858%, which is a bit high and could start applying pressure to the balance sheet.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The dividend has gone from an annual total of €0.0125 in 2014 to the most recent total annual payment of €0.0272. This implies that the company grew its distributions at a yearly rate of about 8.1% over that duration. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Tigné Mall might have put its house in order since then, but we remain cautious.

Tigné Mall Could Grow Its Dividend

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Tigné Mall has seen EPS rising for the last five years, at 9.9% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Tigné Mall Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Tigné Mall is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 3 warning signs for Tigné Mall (1 makes us a bit uncomfortable!) that you should be aware of before investing. Is Tigné Mall 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.