Wendt (India) (NSE:WENDT) Is Paying Out A Larger Dividend Than Last Year
Wendt (India) Limited (NSE:WENDT) will increase its dividend from last year's comparable payment on the 11th of August to ₹50.00. This takes the annual payment to 0.9% of the current stock price, which is about average for the industry.
Check out our latest analysis for Wendt (India)
Wendt (India)'s Earnings Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, Wendt (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 25.0% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 39% 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. The dividend has gone from an annual total of ₹25.00 in 2013 to the most recent total annual payment of ₹80.00. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. It's encouraging to see that Wendt (India) has been growing its earnings per share at 25% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
We Really Like Wendt (India)'s Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Wendt (India) that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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About NSEI:WENDT
Wendt (India)
Manufactures, sells, and services super abrasives, high precision grinding, honing, special purpose machines, and precision components in India and internationally.
Flawless balance sheet average dividend payer.