Jamieson Wellness (TSE:JWEL) Is Increasing Its Dividend To CA$0.23

Jamieson Wellness Inc. (TSE:JWEL) has announced that it will be increasing its periodic dividend on the 12th of September to CA$0.23, which will be 9.5% higher than last year's comparable payment amount of CA$0.21. This will take the dividend yield to an attractive 2.3%, providing a nice boost to shareholder returns.

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Jamieson Wellness' Projected Earnings Seem Likely To Cover Future Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Jamieson Wellness' dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 11.1% if recent trends continue. If the dividend continues on this path, the payout ratio could be 64% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Jamieson Wellness

Jamieson Wellness Doesn't Have A Long Payment History

Jamieson Wellness' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 8 years was CA$0.32 in 2017, and the most recent fiscal year payment was CA$0.84. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. Jamieson Wellness has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Jamieson Wellness has been growing its earnings per share at 11% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Jamieson Wellness Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

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. For example, we've picked out 1 warning sign for Jamieson Wellness that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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