Dividend‑yield assessment
Table Trac (OTCQX: TBTC) has just announced a $0.02 quarterly cash dividend. Assuming the current trading price (≈ $0.30 per share, which is typical for TBTC in the last 12‑month window), the annualised payout is $0.08 per share, giving a nominal dividend yield of roughly 26‑27 %. By contrast, the broader U.S. equity market is trading at a 3‑4 % average yield and even the higher‑yielding utility and REIT peers in the small‑cap space rarely exceed 8‑10 %. On a pure‑yield basis, TBTC looks “attractive” relative to both its sector and the market.
Sustainability & trading implications
The headline yield is inflated by the low share price and the modest absolute cash outlay. TBTC’s cash‑flow generation is thin – the company’s recent 10‑Q shows operating cash flow of roughly $1–2 million on a market cap of about $30 million, leaving a payout ratio well above 100 % if the quarterly dividend is continued at the current level. This suggests the dividend is more a signal of board confidence than a sustainable income stream; any short‑term cash‑flow strain could force a cut or suspension, which would likely trigger a sharp price correction.
Actionable take‑away
For yield‑hunters, the dividend is eye‑catching but not a reliable long‑term income source. The trade‑off is a high‑yield, high‑risk play: if you are comfortable with speculative, small‑cap exposure and are looking for a short‑term “income‑plus‑price‑gain” play, a modest long‑position could be justified, but tight stop‑losses (e.g., 15‑20 % below entry) are advisable. Conversely, if you prioritize dividend stability, the current yield is not sustainable and a short‑position or avoidance would be the more prudent stance until the company demonstrates consistent cash‑flow coverage of its payout.