Yahoo Finance Timbercreek Financial (TSE:TF) Will Pay A Dividend Of CA$0.0575
Timbercreek Financial Corp.'s (TSE:TF) investors are due to receive a payment of CA$0.0575 per share on 15th of February. The dividend yield will be 8.7% based on this payment which is still above the industry average.
Check out our latest analysis for Timbercreek Financial
Timbercreek Financial's Payment Expected To Have Solid Earnings Coverage
If the payments aren't sustainable, a high yield for a few years won't matter that much.
Timbercreek Financial has a good history of paying out dividends, with its current track record at 6 years. Despite this history however, Timbercreek Financial's latest earnings report actually shows that the company didn't have enough earnings to cover its dividends, paying out more than it earned. This is worrying for investors of Timbercreek Financial, as it points towards the dividends being unsustainable in the long term.
EPS is set to grow by 38.9% over the next 3 years. Likewise, analysts forecast that the future payout ratio could reach 89% over that same time period. This is definitely on the higher side, but we wouldn't necessarily say this is unsustainable.
Timbercreek Financial Is Still Building Its Track Record
It is great to see that Timbercreek Financial has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2017, the annual payment back then was CA$0.684, compared to the most recent full-year payment of CA$0.69. Dividend payments have been growing, but very slowly over the period. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.
Dividend Growth May Be Hard To Come By
The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. In the last five years, Timbercreek Financial's earnings per share has shrunk at approximately 6.1% per annum. 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. Earnings are predicted to grow over the next year, but we would remain cautious until a track record of earnings growth is established.
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'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, the dividend is not reliable enough to make this a good income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 2 warning signs for Timbercreek Financial that investors need to be conscious of moving forward. 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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