Toro Company's dividend sustainability under question amid cash flow concerns

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Toro Company's dividend sustainability under question amid cash flow concerns
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The Toro Company (NYSE: TTC ) is set to go ex-dividend in four days, establishing the eligibility date for shareholders to receive dividends. The upcoming dividend, scheduled for payment on October 18th, is pegged at $0.34 per share. The company has a strong history of maintaining its dividend payments, having done so for 40 consecutive years, according to InvestingPro Tips.

Last year, Toro's total dividend amounted to $1.36 per share, yielding a trailing yield of 1.7% based on its stock price of $82.24. This yield is slightly higher than the dividend yield of 1.65% reported by InvestingPro for the year 2023.

However, this payout has raised concerns over the company's cash flow. The concerns stem from the fact that last year's dividend payouts exceeded the free cash flow generated by the company. Such a situation, if repeated, could potentially jeopardize the sustainability of Toro's future dividends. The company's financial health and ability to maintain its dividend payouts will be under scrutiny as it navigates through this cash flow challenge.

InvestingPro's real-time metrics provide a deeper look into the company's financial health. The company's market cap is reported to be $8500M, with a P/E ratio of 22.86. The revenue for the last twelve months (LTM2023.Q3) was $4741.93M, with a revenue growth of 10.19%. However, the quarterly revenue growth for FY2023.Q3 was reported to be -6.79%, aligning with the InvestingPro Tip that the company's revenue growth has been slowing down recently.

The company's return on assets for LTM2023.Q3 is 10.73%, indicating a high return on assets, as suggested by InvestingPro Tips. The operating income for the same period is $639.55M, with an operating income margin of 13.49%. The company's EBITDA growth for LTM2023.Q3 is 23.7%, which is a positive indicator for the company's profitability.

InvestingPro Tips also suggest that the company's stock is currently in oversold territory, and it is trading near its 52-week low. The 1-month and 3-month price total returns are -17.69% and -17.78% respectively, indicating a significant fall in price over the last three months. This aligns with the InvestingPro Tip that the stock has fared poorly over the last month.

For more in-depth analysis and tips, consider subscribing to InvestingPro, which offers additional tips and real-time metrics. For instance, there are 15 additional tips for TTC available on InvestingPro, which can provide valuable insights for investors. You can access these tips here.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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