A 75% Dividend Hike?!

It's currently yielding 5.7%...‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

SPONSORED Mars Technology Declared "Largest Economic Opportunity of the 21st Century" Originally developed to create oxygen on Mars... this technology is now found at facilities run by Ikea, as well as 25 Fortune 100 companies like Walmart and AT&T. Will the IPO stock behind it soar? Get the whole story here. Editor's Note: Tomorrow's the big day... Don't miss Bill O'Reilly's interview with Oxford Club Chief Investment Strategist Alexander Green, How to Legally Rig the Stock Market in Your Favor. Since 2001, Alex has beaten the S&P 500 591% to 237% - and he's revealing his secret in this special event at 1 p.m. ET. Click here to save your seat in the virtual event. - Mable Buchanan, Managing Editor SAFETY NET Can This Steel Producer Sustain Its Generous Dividend Hike? Marc Lichtenfeld, Chief Income Strategist, The Oxford Club Ternium (NYSE: TX) is a Latin American steel producer with 17 production centers in Argentina, Colombia, Mexico, Brazil and other countries. It just raised its dividend in a big way. Shareholders received $2.10 per ADS (American depositary share). That's a 75% hike from a year ago, and it gives the stock an impressive 5.7% yield. But should investors feel confident that the $2.10 per share dividend can be sustained? In 2020, Ternium's free cash flow grew a gigantic 34% to $1.61 billion from $1.2 billion. And that's up from $595 million in 2019, so free cash flow has been growing strongly for several years. Of the $1.2 billion in free cash flow created in 2020, Ternium paid shareholders just $412 million for a very low payout ratio of 34%. As a guideline, I like to see companies with payout ratios of 75% or less of their free cash flow. This year, Wall Street projects $421 million in dividends for an even lower 26% payout ratio. SPONSORED 5G Stock CRUSHES Earnings!! Wall Street is loading up on shares of one 5G SuperStock (with more than $2 billion invested!). Why? Because the stock brings in more cash than IBM, Facebook and even Google! Yet it trades for just $3. Get the scoop on the 5G SuperStock right here. Ternium started paying a dividend in 2007. In 2009, during the Great Recession, it eliminated the payout entirely before bringing it back to previous levels the following year. In 2013, Ternium reduced the dividend to $0.65 from $0.75 per share. Since then, it has raised the dividend six times. So we have a robust 5%-plus yielder that generates mountains of cash flow, much more than is needed to pay the dividend - even the 2021 dividend that grew by 75%. The one concern is that management has shown its willingness to reduce the dividend when necessary. I don't expect that to be necessary in the next 12 months with these big cash flow numbers and low payout ratio. In the near term, the dividend is safe. Dividend History Rating: B If you have a stock whose dividend safety you'd like me to analyze, leave the ticker symbol in the comments section. You can also check to see whether I've written about your favorite dividend payer recently by clicking on the magnifying glass on the upper right corner of the Wealthy Retirement homepage and typing in the company name. Good investing, Marc P.S. Will you be at Alex's special event tomorrow at 1 p.m. ET? If you haven't signed up yet, click here now and reserve a spot for free. Leave a Comment TYPE A COMPANY'S NAME BELOW   MORE FROM WEALTHY RETIREMENT Getting Rich Quick: A Fool's Errand? The Best REITs for Rising Inflation Why Long-Term Investors Should Beware AMC Entertainment Facebook Twitter Email Share Push Alert SPONSORED WANTED: People Who HATE Flipping Houses... but LOVE Collecting Real Estate Income It seems EVERYONE wants to get rich from real estate... Until they realize how much @#$% work it is! But there's a better way. 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