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Highlights
- Corporate Travel Management reduces dividend by 41%.
- Projected earnings per share to rise by 129% next year.
- Dividend history indicates volatility with past cuts.
Corporate Travel Management Limited, known in the stock market by its ticker symbol (ASX:CTD), has announced a reduction in its upcoming dividend. Shareholders can expect a dividend of A$0.10, marking a 41% decrease from last year's payout for the same period. This new dividend yield will sit at an industry-average of 1.6%, aiming for a more sustainable framework.
Analyzing the future trajectory, the company's earnings per share is projected to grow by an impressive 129% over the next year. If recent trends continue, there's a possibility that the payout ratio could establish itself at 22%, which would represent a favorable move towards sustainability.
However, it's worth mentioning the company's history of dividend volatility. Over the past decade, Corporate Travel Management has experienced at least one notable cut in its dividend payments. While the annual payment grew from A$0.12 in 2015 to A$0.29 in the most recent year, the irregularity in dividend distribution might not appeal to those heavily reliant on them for income.
The challenge lies in achieving consistent dividend growth. Earnings per share have declined by approximately 9.6% annually over the past five years. Although a positive growth forecast is in place for the upcoming year, consistent growth remains to be seen.
The reduction strives to align dividends with sustainable standards, the general outlook on Corporate Travel Management’s dividend track record remains mixed. The company does not position itself among the top choices for income-focused investors, with consistency playing a crucial role in investor confidence.
