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Triple Flag Precious Metals Corp. (TSE:TFPM) is about to trade ex-dividend in the next four days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase Triple Flag Precious Metals' shares before the 29th of November in order to receive the dividend, which the company will pay on the 16th of December.
The company's next dividend payment will be US$0.055 per share, and in the last 12 months, the company paid a total of US$0.22 per share. Calculating the last year's worth of payments shows that Triple Flag Precious Metals has a trailing yield of 1.3% on the current share price of CA$23.24. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Triple Flag Precious Metals can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Triple Flag Precious Metals
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Triple Flag Precious Metals paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If Triple Flag Precious Metals didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. Fortunately, it paid out only 35% of its free cash flow in the past year.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Triple Flag Precious Metals was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.