Tootsie Roll Industries (NYSE:TR) Will Pay A Dividend Of $0.09

Tootsie Roll Industries, Inc. (NYSE:TR) will pay a dividend of $0.09 on the 16th of October. The dividend yield is 0.9% based on this payment, which is a little bit low compared to the other companies in the industry.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Tootsie Roll Industries' Future Dividend Projections Appear Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, Tootsie Roll Industries' dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 8.7% if recent trends continue. If the dividend continues on this path, the payout ratio could be 27% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Tootsie Roll Industries

Tootsie Roll Industries Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.231 in 2015, and the most recent fiscal year payment was $0.36. This implies that the company grew its distributions at a yearly rate of about 4.5% over that duration. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

Tootsie Roll Industries Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Tootsie Roll Industries has grown earnings per share at 8.7% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Tootsie Roll Industries' prospects of growing its dividend payments in the future.

Tootsie Roll Industries Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Are management backing themselves to deliver performance? Check their shareholdings in Tootsie Roll Industries in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.