Central Asia Metals plc (LON:CAML) has announced a dividend payment of $0.09 per share on the 22nd of May, with a yield of 9.1%, which is still above the industry average. However, the sustainability of this high yield is in question, as the company was previously paying out 112% of its earnings.
Looking ahead, Central Asia Metals’ earnings per share is forecasted to expand by 40.6% over the next year. If the dividend continues along recent trends, the payout ratio could be 62%, which would be more sustainable for the company.
The company’s dividend history has been marked by instability, with at least one cut in the last 10 years. While the dividend has grown at a rate of about 6.0% annually over that period, there is still caution surrounding the company’s ability to maintain its dividend payments.
With earnings per share falling at approximately 7.3% per year over the past five years, there are concerns about the company’s ability to sustain its dividend growth. While earnings are predicted to rise in the next 12 months, investors may want to exercise caution until this becomes a longer-term trend.
In summary, Central Asia Metals’ dividend may not be as reliable as investors would hope, given the company’s high payout ratio and declining earnings. Investors should consider all factors, including the company’s stability and growth prospects, when assessing the sustainability of its dividend payments.