Man Industries (India) Limited (NSE:MANINDS) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Man Industries (India) Limited (NSE:MANINDS) is about to trade ex-dividend in the next three days. You can purchase shares before the 3rd of November in order to receive the dividend, which the company will pay on the 26th of November.

Man Industries (India)'s next dividend payment will be ₹2.00 per share, which looks like a nice increase on last year, when the company distributed a total of ₹1.00 to shareholders. 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 Man Industries (India) has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Man Industries (India)

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Man Industries (India) paid out just 13% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Man Industries (India) generated enough free cash flow to afford its dividend. The good news is it paid out just 1.3% of its free cash flow in the 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 Man Industries (India) 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 earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Man Industries (India)'s earnings per share have been growing at 11% a year for the past five years. Earnings per share are growing rapidly and the company is keeping more than half of its earnings within the business; an attractive combination which could suggest the company is focused on reinvesting to grow earnings further. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Man Industries (India) has delivered 1.3% dividend growth per year on average over the past 10 years. Earnings per share have been growing much quicker than dividends, potentially because Man Industries (India) is keeping back more of its profits to grow the business.

Final Takeaway

Is Man Industries (India) an attractive dividend stock, or better left on the shelf? It's great that Man Industries (India) is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. There's a lot to like about Man Industries (India), and we would prioritise taking a closer look at it.

So while Man Industries (India) looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 4 warning signs for Man Industries (India) (1 is concerning!) that deserve your attention before investing in the shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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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. 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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