Jindal Saw Limited’s (NSE:JINDALSAW) dividend will be increasing from last year’s payment to ₹4.00 on 18th of July. Despite this raise, the dividend yield of 0.7% is only a modest boost to shareholder returns.
Jindal Saw’s earnings easily cover the dividend, with most of its earnings being retained to grow the business. Over the next year, EPS is forecast to expand by 23.1%. If the dividend continues on this path, the payout ratio could be 7.0% by next year, which we think can be pretty sustainable going forward.
Even over a long history of paying dividends, the company’s distributions have been remarkably stable. Since 2014, the dividend has gone from ₹1.00 total annually to ₹4.00, growing at a yearly rate of about 15% over that duration. Future payments are likely to be reliable based on this track record.
Investors could be attracted to the stock based on the quality of its payment history. Jindal Saw has grown earnings per share at 14% per year over the past five years. With a decent amount of growth and a low payout ratio, this bodes well for the company’s prospects of growing its dividend payments in the future.
In summary, Jindal Saw looks like a great dividend stock with the dividend being increased and its overall sustainability. The company easily earns enough to cover its dividend payments, translating earnings into cash flow. This solid potential as a dividend stock is supported by factors such as consistent dividend policy and growth prospects.
It’s important for investors to consider other factors before investing in a stock. For instance, there may be warning signs to take into consideration. If you are a dividend investor, it might also be beneficial to look at curated lists of high yield dividend stocks.
Valuation is complex, but comprehensive analysis can help determine whether Jindal Saw is potentially over or undervalued. This analysis includes fair value estimates, risks and warnings, dividends, insider transactions, and financial health.
Feedback on this article or concerns about the content can be addressed directly to the editorial team. This article by Simply Wall St provides commentary based on historical data and analyst forecasts using an unbiased methodology. It does not constitute financial advice and does not take into account individual objectives or financial situations. The analysis aims to provide long-term focused insights driven by fundamental data, without factoring in the latest price-sensitive company announcements. Simply Wall St has no position in any stocks mentioned.