Katana Capital (ASX:KAT) Has Confirmed Its Dividend of A$0.005

April 16, 2025 08:30 AM AEST | By Team Kalkine Media

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Katana Capital (ASX:KAT) Has Confirmed Its Dividend of A$0.005 — Image source: Shutterstock

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Highlights

Katana Capital (KAT) announces dividend of A$0.005 per share.

Potential challenges with dividend sustainability noted.

Important considerations around earnings and dividend stability.

The board of Katana Capital Limited (ASX:KAT) recently declared a dividend of A$0.005 per share, payable on the 9th of May. This translates to a 1.7% yield, which is below the industry average. Despite this, Katana Capital's financials suggest a solid coverage of the dividend by both cash flow and earnings, reflecting a significant portion of earnings being reinvested back into the business.

However, there's a possible downturn in Katana Capital’s financial trajectory, with earnings per share (EPS) projected to decline by 13.7% if current trends persist. This raises questions about the long-term sustainability of its dividend policy. The anticipated payout ratio is projected to be around 41%, which may still be manageable under the current climatic conditions.

Historically, dividend volatility has been a concern. Over the past decade, Katana Capital has experienced at least one dividend cut, with dividends falling from A$0.055 annually in 2015 to A$0.02, representing a 9.6% annual decline. Consistent dividend cuts could reflect operational challenges.

Furthermore, Katana Capital's EPS has seen a rapid decline of about 14% annually over the past five years. This trend threatens the long-term feasibility of maintaining current dividend payments, emphasizing a need for turnaround in earnings performance.

Katana Capital continues to offer dividends, the broader picture reveals uncertainties about their sustainability. The company's recent cash flows cover dividend payouts, yet historical instability and declining EPS warrant caution. Investors typically favor stocks with stable dividend policies, so careful analysis of Katana Capital's performance is advisable before making any decisions.

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