Dubai Electricity and Water Authority (PJSC) (DFM:DEWA) Has Announced A Dividend Of AED0.062

The board of Dubai Electricity and Water Authority (PJSC) (DFM:DEWA) has announced that it will pay a dividend on the 31st of October, with investors receiving AED0.062 per share. This means the dividend yield will be fairly typical at 4.5%.

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Dubai Electricity and Water Authority (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. Based on the last payment, Dubai Electricity and Water Authority (PJSC) was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share is forecast to rise by 19.2% over the next year. If the dividend continues on this path, the payout ratio could be 72% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Dubai Electricity and Water Authority (PJSC)

Dubai Electricity and Water Authority (PJSC) Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The payments haven't really changed that much since 3 years ago. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

We Could See Dubai Electricity and Water Authority (PJSC)'s Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Dubai Electricity and Water Authority (PJSC) has impressed us by growing EPS at 7.3% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

In Summary

Overall, a consistent dividend is a good thing, and we think that Dubai Electricity and Water Authority (PJSC) has the ability to continue this into the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 10 Dubai Electricity and Water Authority (PJSC) 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.

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