Himatsingka Seide (NSE:HIMATSEIDE) Has Affirmed Its Dividend Of ₹0.25

The board of Himatsingka Seide Limited (NSE:HIMATSEIDE) has announced that it will pay a dividend of ₹0.25 per share on the 1st of January. This means the annual payment will be 0.2% of the current stock price, which is lower than the industry average.

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Himatsingka Seide's Projected Earnings Seem Likely To Cover Future Distributions

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Himatsingka Seide was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 32.9% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 3.0% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Himatsingka Seide

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from an annual total of ₹1.50 in 2015 to the most recent total annual payment of ₹0.25. Dividend payments have fallen sharply, down 83% over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend Looks Likely To Grow

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Himatsingka Seide has impressed us by growing EPS at 33% per 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.

An additional note is that the company has been raising capital by issuing stock equal to 28% of shares outstanding in the last 12 months. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

We Really Like Himatsingka Seide's Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 4 warning signs for Himatsingka Seide (1 is a bit unpleasant!) 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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