Emirates Integrated Telecommunications Company PJSC (DFM:DU) Is Due To Pay A Dividend Of AED0.24

Emirates Integrated Telecommunications Company PJSC (DFM:DU) will pay a dividend of AED0.24 on the 20th of August. This takes the annual payment to 5.3% of the current stock price, which is about average for the industry.

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Emirates Integrated Telecommunications Company PJSC's Projected Earnings Seem Likely To Cover Future Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Prior to this announcement, the company was paying out 95% of what it was earning and 90% of cash flows. While the cash payout ratio isn't necessarily a cause for concern, the company is probably focusing more on returning cash to shareholders than growing the business.

Earnings per share is forecast to rise by 13.7% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could reach 85%, which is on the higher side, but certainly still feasible.

View our latest analysis for Emirates Integrated Telecommunications Company PJSC

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2015, the dividend has gone from AED0.31 total annually to AED0.54. This works out to be a compound annual growth rate (CAGR) of approximately 5.7% a year over that time. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.

Emirates Integrated Telecommunications Company PJSC's Dividend Might Lack Growth

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Emirates Integrated Telecommunications Company PJSC has grown earnings per share at 15% per year over the past five years. While EPS is growing at a decent rate, but future growth could be limited by the amount of earnings being paid out to shareholders.

The Dividend Could Prove To Be Unreliable

Overall, we always like to see the dividend being raised, but we don't think Emirates Integrated Telecommunications Company PJSC will make a great income stock. In general, the distributions are a little bit higher than we would like, but we can't ignore the fact the quickly growing earnings gives this stock great potential in the future. We would probably look elsewhere for an income investment.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Emirates Integrated Telecommunications Company PJSC that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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