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iA Financial (TSE:IAG) Has Announced That It Will Be Increasing Its Dividend To CA$0.675

iA Financial Corporation Inc.'s (TSE:IAG) dividend will be increasing from last year's payment of the same period to CA$0.675 on 15th of September. This makes the dividend yield about the same as the industry average at 3.8%.

Check out our latest analysis for iA Financial

iA Financial's Dividend Is Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much. Before making this announcement, iA Financial was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 11.4%. If the dividend continues on this path, the payout ratio could be 33% by next year, which we think can be pretty sustainable going forward.

historic-dividend
historic-dividend

iA Financial Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of CA$0.98 in 2012 to the most recent total annual payment of CA$2.70. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

iA Financial Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. iA Financial has impressed us by growing EPS at 7.9% per year over the past five years. iA Financial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

iA Financial Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that iA Financial is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 8 iA Financial analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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