Transformers and Rectifiers (India) (NSE:TRIL) Is Due To Pay A Dividend Of ₹0.15

Transformers and Rectifiers (India) Limited's (NSE:TRIL) investors are due to receive a payment of ₹0.15 per share on 30th of August. This payment means the dividend yield will be 0.2%, which is below the average for the industry.

View our latest analysis for Transformers and Rectifiers (India)

Transformers and Rectifiers (India)'s Earnings Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, Transformers and Rectifiers (India)'s earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

If the trend of the last few years continues, EPS will grow by 49.8% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 3.3% by next year, which is in a pretty sustainable range.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2013, the dividend has gone from ₹0.075 total annually to ₹0.15. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Transformers and Rectifiers (India) has been growing its earnings per share at 50% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

We Really Like Transformers and Rectifiers (India)'s Dividend

Overall, we like to see the dividend staying consistent, and we think Transformers and Rectifiers (India) 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Transformers and Rectifiers (India) that you should be aware of before investing. 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.