Tootsie Roll Industries (NYSE:TR) Has Announced A Dividend Of $0.09

The board of Tootsie Roll Industries, Inc. (NYSE:TR) has announced that it will pay a dividend of $0.09 per share on the 27th of March. This payment means the dividend yield will be 1.1%, which is below the average for the industry.

See our latest analysis for Tootsie Roll Industries

Tootsie Roll Industries' Projected Earnings Seem Likely To Cover Future Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, Tootsie Roll Industries' earnings easily cover the dividend. 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 9.8% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 26%, which is in the range that makes us comfortable with the sustainability of the dividend.

Tootsie Roll Industries Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was $0.231, compared to the most recent full-year payment of $0.36. This means that it has been growing its distributions at 4.5% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

We Could See Tootsie Roll Industries' Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Tootsie Roll Industries has impressed us by growing EPS at 9.8% per year over the past five years. Tootsie Roll Industries definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Tootsie Roll Industries Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Tootsie Roll Industries stock. Is Tootsie Roll Industries 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.