Yahoo Finance Timbercreek Financial (TSE:TF) Has Announced A Dividend Of CA$0.0575
The board of Timbercreek Financial Corp. (TSE:TF) has announced that it will pay a dividend on the 13th of January, with investors receiving CA$0.0575 per share. This means the annual payment is 9.8% of the current stock price, which is above the average for the industry.
View our latest analysis for Timbercreek Financial
Timbercreek Financial's Payment Expected To Have Solid Earnings Coverage
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having paid out dividends for 6 years, Timbercreek Financial has a good history of paying out a part of its earnings to shareholders. But while this history shows that Timbercreek Financial was able to sustain its dividend for a decent period of time, its most recent earnings report shows that the company's net income wasn't enough to cover dividends. This is an alarming sign for the sustainability of its dividends, as it may mean that Timbercreek Financialis pulling cash from elsewhere to keep its shareholders happy.
EPS is forecast to rise by 32.4% over the next 3 years. The future payout ratio over that same time horizon is estimated by analysts to be 89% which is a bit high but can definitely be sustainable.
Timbercreek Financial Is Still Building Its Track Record
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2016, the annual payment back then was CA$0.684, compared to the most recent full-year payment of CA$0.69. Dividend payments have grown at less than 1% a year over this period. Timbercreek Financial hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.
Dividend Growth Is Doubtful
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, things aren't all that rosy. It's not great to see that Timbercreek Financial's earnings per share has fallen at approximately 6.1% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
We're Not Big Fans Of Timbercreek Financial's Dividend
Overall, this isn't a great candidate as an income investment, even though the dividend was stable this year. The company seems to be stretching itself a bit to make such big payments, but it doesn't appear they can be consistent over time. 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. For example, we've picked out 2 warning signs for Timbercreek Financial that investors should know about before committing capital to this stock. 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.
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