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Highlights
- Teekay Tankers Ltd. is set to pay a $0.25 dividend on August 23, offering a yield of about 5.2%.
- The dividend is well-covered by earnings and cash flow, indicating a sustainable payout despite past adjustments.
- With EPS growth of 42% annually over the last five years, Teekay Tankers shows potential for future dividend increases.
Teekay Tankers Ltd. (NYSE:TNK) is set to distribute a dividend of $0.25 on August 23, translating to a yield of approximately 5.2%. The dividend is well-covered by both earnings and cash flow, indicating a stable payout with most earnings retained for business growth.
Teekay Tankers has a history of maintaining dividends, though it has experienced at least one cut in the past decade. Since 2014, the annual dividend payment has increased from $0.96 to $3.00, reflecting a growth rate of around 12% per year. Despite this growth, the company has had a few adjustments to its dividend payouts in the past, suggesting caution for those considering the stock purely for dividend income.
Looking ahead, earnings per share (EPS) is forecasted to decline by 10.7% over the next year. However, the anticipated payout ratio is expected to be around 25%, which aligns with sustainable practices on an earnings basis. Teekay Tankers has demonstrated significant EPS growth of 42% per year over the past five years, which supports its ability to reinvest effectively and potentially enhance future dividend payments.
Overall, Teekay Tankers shows promise with its current dividend strategy and growth trajectory. Although there are projections for a decrease in earnings, the company’s history of dividend growth and strong cash flow position suggest it may continue to offer solid returns in the long term.
