Finolex Cables (NSE:FINCABLES) Has Re-Affirmed Its Dividend Of ₹5.50

Finolex Cables Limited (NSE:FINCABLES) has announced that it will pay a dividend of ₹5.50 per share on the 29th of October. This makes the dividend yield 1.1%, which will augment investor returns quite nicely.

View our latest analysis for Finolex Cables

Finolex Cables' Earnings Easily Cover the Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Finolex Cables was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 3.6% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 19%, which is in the range that makes us comfortable with the sustainability of the dividend.

Finolex Cables Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2011, the first annual payment was ₹0.70, compared to the most recent full-year payment of ₹5.50. This works out to be a compound annual growth rate (CAGR) of approximately 23% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Finolex Cables Could Grow Its Dividend

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 Finolex Cables has been growing its earnings per share at 8.9% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Finolex Cables' prospects of growing its dividend payments in the future.

We Really Like Finolex Cables' Dividend

Overall, we like to see the dividend staying consistent, and we think Finolex Cables 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. See if management have their own wealth at stake, by checking insider shareholdings in Finolex Cables stock. Looking for more high-yielding dividend ideas? Try our curated list 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.
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