Yahoo Finance 360 Capital Group's (ASX:TGP) Dividend Will Be AU$0.015
The board of 360 Capital Group Limited (ASX:TGP) has announced that it will pay a dividend on the 27th of January, with investors receiving AU$0.015 per share. This makes the dividend yield 6.0%, which will augment investor returns quite nicely.
View our latest analysis for 360 Capital Group
360 Capital Group Doesn't Earn Enough To Cover Its Payments
A big dividend yield for a few years doesn't mean much if it can't be sustained. Before making this announcement, the company's dividend was much higher than its earnings. This situation certainly isn't ideal, and could place significant strain on the balance sheet if it continues.
If the company can't turn things around, EPS could fall by 25.6% over the next year. Assuming the dividend continues along recent trends, we believe the payout ratio could reach 250%, which could put the dividend under pressure if earnings don't start to improve.
360 Capital Group's Dividend Has Lacked Consistency
360 Capital Group has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. The first annual payment during the last 9 years was AU$0.05 in 2012, and the most recent fiscal year payment was AU$0.06. This implies that the company grew its distributions at a yearly rate of about 2.0% over that duration. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.
Dividend Growth Potential Is Shaky
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. 360 Capital Group's earnings per share has shrunk at 26% a year over the past five years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.
360 Capital Group's Dividend Doesn't Look Great
Overall, while some might be pleased that the dividend wasn't cut, we think this may help 360 Capital Group make more consistent payments in the future. The company's earnings aren't high enough to be making such big distributions, and it isn't backed up by strong growth or consistency either. Overall, this doesn't get us very excited from an income standpoint.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Case in point: We've spotted 3 warning signs for 360 Capital Group (of which 1 is a bit unpleasant!) you should know about. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.
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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.
