Here's What We Like About Maithan Alloys Limited (NSE:MAITHANALL)'s Upcoming Dividend
Maithan Alloys Limited (NSE:MAITHANALL) is about to trade ex-dividend in the next 3 days. Investors can purchase shares before the 9th of August in order to be eligible for this dividend, which will be paid on the 19th of September.
Maithan Alloys's next dividend payment will be ₹6.00 per share, and in the last 12 months, the company paid a total of ₹6.00 per share. Calculating the last year's worth of payments shows that Maithan Alloys has a trailing yield of 1.4% on the current share price of ₹430.55. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Maithan Alloys has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Maithan Alloys
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Maithan Alloys has a low and conservative payout ratio of just 7.2% of its income after tax. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Luckily it paid out just 3.4% of its free cash flow last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see how much of its profit Maithan Alloys paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see Maithan Alloys's earnings have been skyrocketing, up 84% per annum for the past five years. Maithan Alloys looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Maithan Alloys has lifted its dividend by approximately 34% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
To Sum It Up
Is Maithan Alloys an attractive dividend stock, or better left on the shelf? We love that Maithan Alloys is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. Maithan Alloys looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
Curious about whether Maithan Alloys has been able to consistently generate growth? Here's a chart of its historical revenue and earnings growth.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
