Only Four Days Left To Cash In On TTET Union's (TWSE:1232) Dividend

Readers hoping to buy TTET Union Corporation (TWSE:1232) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day 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. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, TTET Union investors that purchase the stock on or after the 17th of July will not receive the dividend, which will be paid on the 8th of August.

The company's next dividend payment will be NT$6.60 per share, on the back of last year when the company paid a total of NT$6.60 to shareholders. Based on the last year's worth of payments, TTET Union has a trailing yield of 4.5% on the current stock price of NT$147.50. If you buy this business for its dividend, you should have an idea of whether TTET Union's dividend is reliable and sustainable. So we need to investigate whether TTET Union can afford its dividend, and if the dividend could grow.

Check out our latest analysis for TTET Union

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Last year, TTET Union paid out 93% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It distributed 48% of its free cash flow as dividends, a comfortable payout level for most companies.

It's good to see that while TTET Union's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if this were to happen repeatedly, we'd be concerned about whether the dividend is sustainable in a downturn.

Click here to see how much of its profit TTET Union 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. With that in mind, we're encouraged by the steady growth at TTET Union, with earnings per share up 4.7% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, TTET Union has lifted its dividend by approximately 5.7% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is TTET Union worth buying for its dividend? TTET Union has been steadily growing its earnings per share, and it is paying out just 48% of its cash flow but an uncomfortably high 93% of its income. Overall, it's hard to get excited about TTET Union from a dividend perspective.

If you want to look further into TTET Union, it's worth knowing the risks this business faces. To help with this, we've discovered 1 warning sign for TTET Union that you should be aware of before investing in their shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com