Yahoo Finance Bailador Technology Investments (ASX:BTI) Is Reducing Its Dividend To A$0.032
Bailador Technology Investments Limited (ASX:BTI) is reducing its dividend from last year's comparable payment to A$0.032 on the 7th of September. Despite the cut, the dividend yield of 4.9% will still be comparable to other companies in the industry.
See our latest analysis for Bailador Technology Investments
Bailador Technology Investments Is Paying Out More Than It Is Earning
We aren't too impressed by dividend yields unless they can be sustained over time. Before this announcement, Bailador Technology Investments was paying out 178% of what it was earning, and not generating any free cash flows either. Paying out such a large dividend compared to earnings while also not generating any free cash flow would definitely be difficult to keep up.
EPS is set to grow by 4.2% over the next year if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could reach 172%, which probably can't continue without starting to put some pressure on the balance sheet.
Bailador Technology Investments Doesn't Have A Long Payment History
The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2021, the annual payment back then was A$0.014, compared to the most recent full-year payment of A$0.064. This means that it has been growing its distributions at 114% per annum over that time. Bailador Technology Investments has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
Dividend Growth May Be Hard To Achieve
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings has been rising at 4.2% per annum over the last five years, which admittedly is a bit slow. The earnings growth is anaemic, and the company is paying out 178% of its profit. This gives limited room for the company to raise the dividend in the future.
Bailador Technology Investments' Dividend Doesn't Look Sustainable
Overall, the dividend looks like it may have been a bit high, which explains why it has now been cut. The payments are bit high to be considered sustainable, and the track record isn't the best. We don't think Bailador Technology Investments is a great stock to add to your portfolio if income is your focus.
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. For example, we've identified 3 warning signs for Bailador Technology Investments (2 can't be ignored!) that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection 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.
