When might Corporate Travel shares start paying dividends again?

It;s been two years since investors saw a dividend from this ASX travel share…

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Key points

  • The Corporate Travel share price has had a bumpy flight over 2022 thus far
  • The company hasn't paid a dividend since 2020 either
  • So when will Corporate Travel shares start paying dividends again?

It’s been a very bumpy ride for the Corporate Travel Management Ltd (ASX: CTD) share price in recent months.

This ASX 200 travel share has lost 16% of its value over June and remains down by 19% in 2022. Like many ASX travel shares, the pandemic has given this company a lot of grief over the past few years. Corporate Travel Management is still struggling with the aftershocks today.

We can see this evident in Corporate Travel’s dividend history.

This travel share used to be a strong dividend-payer on the ASX. In 2019, the company paid out 40 cents per share in dividends. That would equate to a yield of over 2% on today’s share price. But the company only doled out 18 cents per share in 2020 before cancelling its dividend entirely. As of June 2022, it has yet to resume paying dividends.

So when will Corporate Travel Management re-enter the fray as an ASX dividend share?

When will Corporate Travel shares start paying dividends again?

Well, it’s hard to say. But going off the company’s update last month, there’s a chance it could be sooner rather than later.

Last month, Corporate Travel told investors that it is anticipating its monthly revenue could reach 2019 levels by the fourth quarter of this year.

The company is aiming for earnings before interest, tax, depreciation, and amortisation (EBITDA) of $265 million when the travel industry fully recovers from COVID-19.

For a business to be able to pay out sustainable dividends, it must first be sustainably profitable. If the company’s own predictions turn out to be accurate, it could be in a place to resume dividend payments soon.

But saying that, management could instead decide to reinvest its earnings back into the business for the next few years — even if it could afford to resume dividends. Remember, a dividend comes with an opportunity cost for every business.

But we shall have to wait and see what the company does next to be sure.

In the meantime, the current Corporate Travel Management share price gives this ASX 200 travel share a market capitalisation of $2.7 billion.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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