Advertisement
Canada markets closed
  • S&P/TSX

    21,531.07
    -21.28 (-0.10%)
     
  • S&P 500

    5,130.95
    -6.13 (-0.12%)
     
  • DOW

    38,989.83
    -97.55 (-0.25%)
     
  • CAD/USD

    0.7367
    -0.0012 (-0.16%)
     
  • CRUDE OIL

    78.74
    0.00 (0.00%)
     
  • Bitcoin CAD

    92,680.51
    +7,017.74 (+8.19%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,123.90
    -2.40 (-0.11%)
     
  • RUSSELL 2000

    2,074.31
    -2.09 (-0.10%)
     
  • 10-Yr Bond

    4.2190
    +0.0390 (+0.93%)
     
  • NASDAQ futures

    18,231.75
    -30.25 (-0.17%)
     
  • VOLATILITY

    13.49
    +0.38 (+2.90%)
     
  • FTSE

    7,640.33
    -42.17 (-0.55%)
     
  • NIKKEI 225

    40,109.23
    +198.41 (+0.50%)
     
  • CAD/EUR

    0.6784
    -0.0018 (-0.26%)
     

Rogers Sugar (TSE:RSI) Is Due To Pay A Dividend Of CA$0.09

Rogers Sugar Inc. (TSE:RSI) has announced that it will pay a dividend of CA$0.09 per share on the 1st of February. This means the annual payment is 6.2% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Rogers Sugar

Rogers Sugar Might Find It Hard To Continue The Dividend

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Even though Rogers Sugar is not generating a profit, it is still paying a dividend. The company is also yet to generate cash flow, so the dividend sustainability is definitely questionable.

Over the next year, EPS could expand by 0.08% if recent trends continue. While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability. Unfortunately, for the dividend to continue at current levels the company definitely needs to get there sooner rather than later.

historic-dividend
historic-dividend

Rogers Sugar Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2012, the dividend has gone from CA$0.34 total annually to CA$0.36. Dividend payments have grown at less than 1% a year over this period. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

Rogers Sugar May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Unfortunately, Rogers Sugar's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. With EPS growth hard to come by and the company not turning a profit, we wouldn't be particularly optimistic about the growth prospects for Rogers Sugar's dividend in the future.

Rogers Sugar's Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Rogers Sugar's payments, as there could be some issues with sustaining them into the future. Although they have been consistent in the past, we think the payments are a little high to be sustained. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 3 warning signs for Rogers Sugar (2 are concerning!) that you should be aware of before investing. Is Rogers Sugar not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here