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Maruti Suzuki India (NSE:MARUTI) Is Increasing Its Dividend To ₹125.00

Maruti Suzuki India Limited (NSE:MARUTI) has announced that it will increase its dividend to ₹125.00 on the 3rd of September. This represents a 1.0% annual payment of the current stock price, which is in line with industry averages.

Prior to this announcement, Maruti Suzuki India’s dividend was well covered by both cash flow and earnings, with a significant portion of earnings being reinvested back into the business. The company is projected to see a 29.4% growth in EPS next year, which could result in a sustainable payout ratio of 25%.

Despite a history of cutting dividends at least once in the last 10 years, Maruti Suzuki India has managed to grow its distributions by 26% per annum since 2014. However, investors should be cautious as companies that have cut dividends in the past may do so again.

Earnings per share for Maruti Suzuki India have grown at a rate of 11% per year over the past five years, indicating potential for stronger dividends in the future. Overall, the company’s track record and growing earnings make it a strong income stock.

It is important to note that consistent dividend policies can instill greater investor confidence. For those considering investing in Maruti Suzuki India, it may be helpful to conduct a comprehensive analysis to determine if the stock is potentially over or undervalued.

As with any investment decision, it is advisable to seek professional financial advice tailored to your individual objectives and financial situation. This article by Simply Wall St provides commentary based on historical data and analyst forecasts, and is not intended as financial advice.

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