At Simply Wall St, we have a strong appreciation for dividends, so it’s always exciting to see companies like PDS Limited (NSE:PDSL) gearing up to trade ex-dividend in the next 4 days. The ex-dividend date is crucial as it determines who is eligible to receive the dividend based on their presence in the company’s books as a shareholder. For PDS investors, purchasing the stock on or after July 19th means missing out on the upcoming dividend payment scheduled for August 25th.
The upcoming dividend payment from PDS will be ₹3.15 per share, following last year’s total payout of ₹4.75 to shareholders. With a trailing yield of 0.9% on the current stock price of ₹508.95, it’s essential to ensure that the dividend payments are sustainable and in line with the company’s growth trajectory.
Dividends are typically paid from company earnings, so it’s crucial to assess whether the payouts are supported by profits and free cash flow. While PDS’s payout ratio stands at 43% of profit, indicating a modest level of dividend coverage, the company’s high percentage of dividends paid out in relation to free cash flow raises concerns about the sustainability of future payments.
Earnings and dividend growth are key indicators of a company’s financial health, and PDS has shown strong growth in both areas. With earnings increasing by 27% annually over the past five years and a 15% average dividend growth rate over the last three years, PDS has demonstrated a positive trend in its financial performance.
While PDS’s dividend prospects appear promising, it’s important to consider the risks involved in investing in the stock. With a high cashflow payout ratio and potential warning signs highlighted in our analysis, investors should weigh their options carefully before making a decision.
In conclusion, while PDS presents an appealing dividend opportunity, investors should conduct thorough research and consider all factors before investing. Our comprehensive analysis provides insights into PDS’s valuation, risks, dividends, insider transactions, and financial health to help investors make informed decisions.