Cantabil Retail India Limited (NSE:CANTABIL) Passed Our Checks, And It's About To Pay A ₹1.00 Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Cantabil Retail India Limited (NSE:CANTABIL) is about to trade ex-dividend in the next 3 days. Investors can purchase shares before the 12th of February in order to be eligible for this dividend, which will be paid on the 7th of March.

The upcoming dividend for Cantabil Retail India is ₹1.00 per share. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Cantabil Retail India can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Cantabil Retail India

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Cantabil Retail India paid out just 24% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

Click here to see how much of its profit Cantabil Retail India paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, Cantabil Retail India's earnings per share have been growing at 19% a year for the past five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.

This is Cantabil Retail India's first year of paying a dividend, which is exciting for shareholders - but it does mean there's no dividend history to examine.

To Sum It Up

Is Cantabil Retail India an attractive dividend stock, or better left on the shelf? Companies like Cantabil Retail India that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. We think this is a pretty attractive combination, and would be interested in investigating Cantabil Retail India more closely.

In light of that, while Cantabil Retail India has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 4 warning signs for Cantabil Retail India (1 can't be ignored!) that you ought to be aware of before buying the shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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