GMM Pfaudler (NSE:GMMPFAUDLR) Has Announced A Dividend Of ₹1.00

The board of GMM Pfaudler Limited (NSE:GMMPFAUDLR) has announced that it will pay a dividend of ₹1.00 per share on the 4th of December. This means the annual payment will be 0.2% of the current stock price, which is lower than the industry average.

Check out our latest analysis for GMM Pfaudler

GMM Pfaudler's Payment Could Potentially Have Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, GMM Pfaudler was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 160.8%. If the dividend continues along recent trends, we estimate the payout ratio will be 3.6%, which is in the range that makes us comfortable with the sustainability of the dividend.

GMM Pfaudler Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was ₹0.933, compared to the most recent full-year payment of ₹2.00. This means that it has been growing its distributions at 7.9% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

GMM Pfaudler Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that GMM Pfaudler has grown earnings per share at 9.4% 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.

We Really Like GMM Pfaudler's Dividend

Overall, we like to see the dividend staying consistent, and we think GMM Pfaudler might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Taking the debate a bit further, we've identified 1 warning sign for GMM Pfaudler 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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