LIC Housing Finance (NSE:LICHSGFIN) Is Due To Pay A Dividend Of ₹8.50

LIC Housing Finance Limited's (NSE:LICHSGFIN) investors are due to receive a payment of ₹8.50 per share on 29th of October. Based on this payment, the dividend yield will be 2.2%, which is fairly typical for the industry.

See our latest analysis for LIC Housing Finance

LIC Housing Finance's Payment Expected To Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time.

Having distributed dividends for at least 10 years, LIC Housing Finance has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, LIC Housing Finance's payout ratio sits at 15%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, EPS is forecast to rise by 29.0% over the next 3 years. The future payout ratio could be 19% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

LIC Housing Finance Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the dividend has gone from ₹3.60 total annually to ₹8.50. This works out to be a compound annual growth rate (CAGR) of approximately 9.0% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

LIC Housing Finance Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that LIC Housing Finance has grown earnings per share at 7.7% per 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.

LIC Housing Finance Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for LIC Housing Finance that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.