<!-- HTML_TAG_START -->NZSE:TWR Historic Dividend January 10th 2025<!-- HTML_TAG_END -->
Regular readers will know that we love our dividends at Simply Wall St, which is why it’s exciting to see Tower Limited (NZSE:TWR) 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. In other words, investors can purchase Tower’s shares before the 15th of January in order to be eligible for the dividend, which will be paid on the 30th of January.
The company’s upcoming dividend is NZ$0.065 a share, following on from the last 12 months, when the company distributed a total of NZ$0.13 per share to shareholders. Last year’s total dividend payments show that Tower has a trailing yield of 9.5% on the current share price of NZ$1.365. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That’s why we should always check whether the dividend payments appear sustainable, and if the company is growing.
See our latest analysis for Tower
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Tower is paying out an acceptable 51% of its profit, a common payout level among most companies.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Businesses with strong growth prospects usually make the best dividend payers, because it’s easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That’s why it’s comforting to see Tower’s earnings have been skyrocketing, up 32% per annum for the past five years.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. It looks like the Tower dividends are largely the same as they were 10 years ago.
Is Tower worth buying for its dividend? Earnings per share are growing nicely, and Tower is paying out a percentage of its earnings that is around the average for dividend-paying stocks. We think this is a pretty attractive combination, and would be interested in investigating Tower more closely.
