Lundin Mining Corporation (TSE:LUN) has announced that it will pay a dividend of $0.09 per share on the 11th of September. This means the annual payment is 2.9% of the current stock price, which is above the average for the industry.
See our latest analysis for Lundin Mining
Lundin Mining’s Payment Has Solid Earnings Coverage
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Lundin Mining’s profits didn’t cover the dividend, but the company was generating enough cash instead. Healthy cash flows are always a positive sign, especially when they quite easily cover the dividend.
Looking forward, earnings per share is forecast to rise exponentially over the next year. Assuming the dividend continues along recent trends, we estimate that the payout ratio could reach 62%, which is in a comfortable range for us.
