Pine Cliff Energy (TSE:PNE) Is Paying Out A Dividend Of CA$0.0108
The board of Pine Cliff Energy Ltd. (TSE:PNE) has announced that it will pay a dividend on the 31st of August, with investors receiving CA$0.0108 per share. The dividend yield will be 8.7% based on this payment which is still above the industry average.
See our latest analysis for Pine Cliff Energy
Pine Cliff Energy Doesn't Earn Enough To Cover Its Payments
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last payment made up 91% of earnings, but cash flows were much higher. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment.
EPS is set to fall by 63.6% over the next 12 months. If the dividend continues along the path it has been on recently, the company could be paying out more than double what it is earning, which is definitely a bit high to be sustainable going forward.
Pine Cliff Energy Is Still Building Its Track Record
The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.
Dividend Growth Could Be Constrained
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Pine Cliff Energy has grown earnings per share at 64% per year over the past five years. However, Pine Cliff Energy isn't reinvesting a lot back into the business, so we wonder how quickly it will be able to grow in the future.
Our Thoughts On Pine Cliff Energy's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. Overall, we don't think this company has the makings of a good income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 3 warning signs for Pine Cliff Energy that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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