BLS International Services (NSE:BLS) Is Increasing Its Dividend To ₹1.00

BLS International Services Limited's (NSE:BLS) dividend will be increasing from last year's payment of the same period to ₹1.00 on 16th of October. Even though the dividend went up, the yield is still quite low at only 0.3%.

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BLS International Services' Future Dividend Projections Appear Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. However, BLS International Services' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 79.9% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 5.1% by next year, which is in a pretty sustainable range.

View our latest analysis for BLS International Services

BLS International Services' Dividend Has Lacked Consistency

BLS International Services has been paying dividends for a while, but the track record isn't stellar. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. The dividend has gone from an annual total of ₹0.025 in 2016 to the most recent total annual payment of ₹1.00. This implies that the company grew its distributions at a yearly rate of about 51% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that BLS International Services has been growing its earnings per share at 80% a year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

BLS International Services Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. Now, if you want to look closer, it would be worth checking out our free research on BLS International Services management tenure, salary, and performance. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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