LIC Housing Finance's (NSE:LICHSGFIN) Dividend Will Be ₹8.50

LIC Housing Finance Limited (NSE:LICHSGFIN) will pay a dividend of ₹8.50 on the 29th of October. This payment means that the dividend yield will be 2.0%, which is around the industry average.

See our latest analysis for LIC Housing Finance

LIC Housing Finance's Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

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. While past data isn't a guarantee for the future, LIC Housing Finance's latest earnings report puts its payout ratio at 15%, showing that the company can pay out its dividends comfortably.

Over the next 3 years, EPS is forecast to expand by 30.1%. Analysts forecast the future payout ratio could be 18% over the same time horizon, which is a number we think the company can maintain.

LIC Housing Finance Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2012, the annual payment back then was ₹3.60, compared to the most recent full-year payment of ₹8.50. This means that it has been growing its distributions at 9.0% per annum 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. LIC Housing Finance has impressed us by growing EPS at 7.7% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for LIC Housing Finance's prospects of growing its dividend payments in the future.

We Really Like LIC Housing Finance's Dividend

Overall, we like to see the dividend staying consistent, and we think LIC Housing Finance might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for LIC Housing Finance that investors need to be conscious of moving forward. 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.