Chemours (NYSE:CC) Has Announced A Dividend Of $0.25

The board of The Chemours Company (NYSE:CC) has announced that it will pay a dividend on the 15th of March, with investors receiving $0.25 per share. This means the annual payment is 3.6% of the current stock price, which is above the average for the industry.

See our latest analysis for Chemours

Chemours' Dividend Is Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Even in the absence of profits, Chemours is paying a dividend. Along with this, it is also not generating free cash flows, which raises concerns about the sustainability of the dividend.

According to analysts, EPS should be several times higher next year. If the dividend extends its recent trend, estimates say the dividend could reach 29%, which we would be comfortable to see continuing.

Chemours Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of $0.12 in 2016 to the most recent total annual payment of $1.00. This implies that the company grew its distributions at a yearly rate of about 30% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Dividend Growth Potential Is Shaky

The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. Chemours' earnings per share has shrunk at 11% a year over the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. On the bright side, earnings are predicted to gain some ground over the next year, but until this turns into a pattern we wouldn't be feeling too comfortable.

Chemours' Dividend Doesn't Look Great

Overall, while some might be pleased that the dividend wasn't cut, we think this may help Chemours make more consistent payments in the future. The company isn't making enough to be paying as much as it is, and the other factors don't look particularly promising either. We don't think that this is a great candidate to be an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 2 warning signs for Chemours that you should be aware of before investing. Is Chemours not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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