It looks like Treasury Wine Estates Limited (ASX:TWE) is about to go ex-dividend in the next four days. The ex-dividend date is two business days before a company’s record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company’s books on the record date. Thus, you can purchase Treasury Wine Estates’ shares before the 27th of August in order to receive the dividend, which the company will pay on the 2nd of October.
The company’s next dividend payment will be AU$0.20 per share. Last year, in total, the company distributed AU$0.40 to shareholders. Based on the last year’s worth of payments, Treasury Wine Estates has a trailing yield of 4.9% on the current stock price of AU$8.15. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
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If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Treasury Wine Estates is paying out an acceptable 74% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether Treasury Wine Estates generated enough free cash flow to afford its dividend. Over the last year, it paid out more than three-quarters (81%) of its free cash flow generated, which is fairly high and may be starting to limit reinvestment in the business.
It’s positive to see that Treasury Wine Estates’s dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
See our latest analysis for Treasury Wine Estates
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
ASX:TWE Historic Dividend August 22nd 2025
Businesses with strong growth prospects usually make the best dividend payers, because it’s easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we’re encouraged by the steady growth at Treasury Wine Estates, with earnings per share up 9.6% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. If management lifts the payout ratio further, we’d take this as a tacit signal that the company’s growth prospects are slowing.
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Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Treasury Wine Estates has lifted its dividend by approximately 12% a year on average. We’re glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
Is Treasury Wine Estates an attractive dividend stock, or better left on the shelf? Earnings per share have been growing modestly and Treasury Wine Estates paid out a bit over half of its earnings and free cash flow last year. To summarise, Treasury Wine Estates looks okay on this analysis, although it doesn’t appear a stand-out opportunity.
If you want to look further into Treasury Wine Estates, it’s worth knowing the risks this business faces. For example – Treasury Wine Estates has 1 warning sign we think you should be aware of.
If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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