Minerals Technologies (NYSE:MTX) Is Paying Out A Dividend Of $0.11
Minerals Technologies Inc. (NYSE:MTX) will pay a dividend of $0.11 per share on September 5, yielding 0.8%. Despite a stable dividend history, concerns arise as profits did not cover the last payment, and the payout ratio may reach 229%. Although EPS is forecasted to rise, the company has seen a 55% annual decline in EPS over the past five years, raising doubts about the sustainability of future dividends. Investors should be cautious, as the current dividend level may be unsustainable in the long term.
Minerals Technologies Inc.'s (NYSE:MTX) investors are due to receive a payment of $0.11 per share on 5th of September. This payment means the dividend yield will be 0.8%, which is below the average for the industry.
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Estimates Indicate Minerals Technologies' Could Struggle to Maintain Dividend Payments In The Future
Even a low dividend yield can be attractive if it is sustained for years on end. Based on the last payment, Minerals Technologies' profits didn't cover the dividend, but the company was generating enough cash instead. Healthy cash flows are always a positive sign, especially when they quite easily cover the dividend.
EPS is forecast to rise very quickly over the next 12 months. If recent patterns in the dividend continues, we would start to get a bit worried, with the payout ratio possibly reaching 229%.
Check out our latest analysis for Minerals Technologies
Minerals Technologies Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the dividend has gone from $0.20 total annually to $0.44. This means that it has been growing its distributions at 8.2% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
Dividend Growth Potential Is Shaky
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, initial appearances might be deceiving. Over the past five years, it looks as though Minerals Technologies' EPS has declined at around 55% a year. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. Over the next year, however, earnings are actually predicted to rise, but we would still be cautious until a track record of earnings growth can be built.
In Summary
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The company is generating plenty of cash, but we still think the dividend is a bit high for comfort. We don't think Minerals Technologies is a great stock to add to your portfolio if income is your focus.
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 instance, we've picked out 2 warning signs for Minerals Technologies that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
