Computer Age Management Services (NSE:CAMS) Is Increasing Its Dividend To ₹12.00

Computer Age Management Services Limited's (NSE:CAMS) dividend will be increasing from last year's payment of the same period to ₹12.00 on 29th of February. This makes the dividend yield about the same as the industry average at 1.3%.

See our latest analysis for Computer Age Management Services

Computer Age Management Services' Earnings Easily Cover The Distributions

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. The last dividend was quite easily covered by Computer Age Management Services' earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 64.0%. If the dividend continues on this path, the payout ratio could be 47% by next year, which we think can be pretty sustainable going forward.

Computer Age Management Services' Dividend Has Lacked Consistency

Even in its short history, we have seen the dividend cut. The dividend has gone from an annual total of ₹13.50 in 2021 to the most recent total annual payment of ₹37.75. This means that it has been growing its distributions at 41% per annum over that time. 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

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Computer Age Management Services has seen EPS rising for the last five years, at 20% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Computer Age Management Services Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Computer Age Management Services is a strong income stock thanks to its track record and growing earnings. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 Computer Age Management Services that investors should know about before committing capital to this stock. 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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