Inversiones Tricahue S.A. (SNSE:TRICAHUE) is set to pay a dividend of CLP47.43 on May 27th. This amount represents 6.4% of the current stock price, which is lower compared to other companies in the industry. It is important for income investors to consider not only the dividend yield but also any significant movements in the share price, as this can impact overall gains from distributions. In the last 3 months, Inversiones Tricahue’s stock price has increased by 35%, which is positive for shareholders but may explain the decrease in the dividend yield.
Despite the lower dividend yield, Inversiones Tricahue has solid earnings coverage to sustain it over time. The company has been earning enough to cover the dividend, with most earnings being reinvested to support business growth. Earnings per share could potentially increase by 12.7% in the next year, maintaining a sustainable payout ratio of 80%.
However, the company has experienced dividend volatility, with at least one cut in the last decade. The total annual dividend has decreased over the years, which raises concerns for investors looking for stable dividend growth. On the bright side, Inversiones Tricahue has shown a 13% growth in earnings per share annually over the past five years, indicating potential for future dividend growth.
In conclusion, while there have been fluctuations in the dividend history, Inversiones Tricahue has the potential to be a solid income stock moving forward. By maintaining a consistent dividend policy and focusing on business growth, the company can build investor confidence and possibly increase dividend payments in the future. Investors should consider the company’s valuation and potential risks before making investment decisions.