Dividend Payment Looms Over Ternium's Sustainability
Ternium S.A.'s (NYSE:TX) upcoming dividend payment of $1.80 per share on May 14th raises questions about the company's long-term sustainability. Despite a strong dividend yield, the payout ratio appears unsustainable given Ternium's lack of profits and high distribution levels. The company's earnings per share has been declining at 12% annually over the past five years.
- Ternium's recent history of cutting dividends may be a harbinger of more aggressive cost-cutting measures to maintain profitability, which could have significant implications for investors.
- What will happen to Ternium's dividend payments if the company fails to reverse its decline in earnings per share and instead continues to rely on cash infusions from shareholders?