Black Diamond Group (TSE:BDI) Has Announced A Dividend Of CA$0.035

The board of Black Diamond Group Limited (TSE:BDI) has announced that it will pay a dividend of CA$0.035 per share on the 15th of July. This makes the dividend yield 1.5%, which will augment investor returns quite nicely.

We've discovered 2 warning signs about Black Diamond Group. View them for free.

Black Diamond Group's Projected Earnings Seem Likely To Cover Future Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, Black Diamond Group's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 12.3%. Assuming the dividend continues along recent trends, we think the payout ratio could be 19% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Black Diamond Group

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. The annual payment during the last 10 years was CA$0.90 in 2015, and the most recent fiscal year payment was CA$0.14. Dividend payments have fallen sharply, down 84% over that time. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Black Diamond Group has seen EPS rising for the last five years, at 41% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Black Diamond Group Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Black Diamond Group might even raise payments in the future. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 2 warning signs for Black Diamond Group that investors should take into consideration. Is Black Diamond Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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