The double whammy of interest rate hikes and inflation has forced several debt-heavy companies – which are part of capital-intensive sectors such as real estate, utilities, and energy – to lower their dividend yields in the last two years.
The rising cost of debt has made it difficult for companies to service their interest payments while allocating funds toward organic growth and dividends. In November 2023, I warned investors about the risks of investing in high dividend stocks such as Innergex Renewable (TSX:INE) due to its unsustainable payout ratio of more than 100%. Soon after, Innergex Renewable cut its quarterly dividend payout by 50%.
Today, the renewable energy company pays shareholders a quarterly dividend of $0.09 per share, translating to a yield of 4.2%. Is it a good time to scoop up shares of the TSX dividend stock?
An overview of Innergex Renewable
Valued at a market cap of $1.8 billion, Innergex Renewable is…
