Torslanda Property Investment (STO:TORSAB) Has Re-Affirmed Its Dividend Of kr0.22

Torslanda Property Investment AB (publ) (STO:TORSAB) will pay a dividend of kr0.22 on the 14th of October. This makes the dividend yield 4.5%, which will augment investor returns quite nicely.

See our latest analysis for Torslanda Property Investment

Torslanda Property Investment's Earnings Easily Cover the Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, prior to this announcement, Torslanda Property Investment's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 34.8% over the next 12 months. If the dividend continues on this path, the payout ratio could be 20% by next year, which we think can be pretty sustainable going forward.

Torslanda Property Investment Is Still Building Its Track Record

Torslanda Property Investment's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The first annual payment during the last 6 years was kr0.80 in 2015, and the most recent fiscal year payment was kr0.88. This works out to be a compound annual growth rate (CAGR) of approximately 1.6% 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 Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Torslanda Property Investment has grown earnings per share at 35% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like Torslanda Property Investment's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Torslanda Property Investment has 3 warning signs (and 1 which can't be ignored) we think you should know about. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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