Something To Consider Before Buying Sintex Industries Limited (NSE:SINTEX) For The 1.2% Dividend
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Historically, Sintex Industries Limited (NSE:SINTEX) has paid a dividend to shareholders. It currently yields 1.2%. Does Sintex Industries tick all the boxes of a great dividend stock? Below, I'll take you through my analysis.
Check out our latest analysis for Sintex Industries
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is it the top 25% annual dividend yield payer?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How does Sintex Industries fare?
The company currently pays out 3.5% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. Not only have dividend payouts from Sintex Industries fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
Compared to its peers, Sintex Industries produces a yield of 1.2%, which is high for Luxury stocks but still below the market's top dividend payers.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Sintex Industries for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I've compiled three fundamental aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for SINTEX’s future growth? Take a look at our free research report of analyst consensus for SINTEX’s outlook.
- Historical Performance: What has SINTEX's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.