Tamawood (ASX:TWD) is set to distribute a dividend

April 14, 2025 05:32 PM PDT | By Team Kalkine Media

Tamawood (ASX:TWD) is set to distribute a dividend — Image source: Shutterstock

Evaluating Dividend Sustainability

Despite the attractive yield, concerns linger about the sustainability of such dividends. Prior to this announcement, Tamawood distributed 131% of its earnings, a figure that might not be sustainable in the long run. Should earnings remain stable over the coming year, the payout ratio could decrease to 120%, which may still strain the company's finances.

Historical Dividend Performance

When reviewing Tamawood's dividend record, there have been fluctuations. The dividend increased slightly from A$0.21 in 2015 to a recent A$0.22. However, the growth rate has been under 1% annually, and past reductions in dividend size further complicate its attractiveness for income-focused investors.

Prospects for Future Dividend Growth

Though Tamawood has experienced an 8.6% annual growth in earnings per share over the past five years, its reinvestment strategies might slow future growth. This lack of reinvestment could limit the potential for significant dividend increases moving forward.

Overall Assessment

Tamawood continues to extend dividends this year, the financial mechanics suggest challenges ahead in maintaining these payments at attractive levels. Consistent and reliable dividends are typically more valued in the market, whereas unpredictable payouts may deter potential investors.

Investors may wish to explore further analysis of Tamawood, including a review of warning signs and valuation metrics that provide insight into the company's financial health. Such due diligence can be essential in making informed decisions.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.