Trident (NSE:TRIDENT) Is Paying Out A Larger Dividend Than Last Year

Trident Limited (NSE:TRIDENT) will increase its dividend from last year's comparable payment on the 20th of June to ₹0.50. This makes the dividend yield 1.5%, which is above the industry average.

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Trident's Projected Earnings Seem Likely To Cover Future Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Trident was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.

The next year is set to see EPS grow by 91.8%. If the dividend continues on this path, the payout ratio could be 39% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Trident

Trident Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ₹0.03 in 2015, and the most recent fiscal year payment was ₹0.50. This works out to be a compound annual growth rate (CAGR) of approximately 32% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Trident May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Unfortunately, Trident's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. Trident is struggling to find viable investments, so it is returning more to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.

Trident Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in Trident in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.