Whirlpool of India (NSE:WHIRLPOOL) Has Re-Affirmed Its Dividend Of ₹5.00

The board of Whirlpool of India Limited (NSE:WHIRLPOOL) has announced that it will pay a dividend of ₹5.00 per share on the 15th of September. This payment means the dividend yield will be 0.2%, which is below the average for the industry.

Check out our latest analysis for Whirlpool of India

Whirlpool of India's Payment Has Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end. However, Whirlpool of India's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 7.9% over the next 12 months. If the dividend continues on this path, the payout ratio could be 19% by next year, which we think can be pretty sustainable going forward.

Whirlpool of India Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The dividend has gone from ₹3.00 in 2017 to the most recent annual payment of ₹5.00. This means that it has been growing its distributions at 14% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

We Could See Whirlpool of India's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see Whirlpool of India has been growing its earnings per share at 7.9% a year over the past five years. Whirlpool of India definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On Whirlpool of India's Dividend

Overall, a consistent dividend is a good thing, and we think that Whirlpool of India has the ability to continue this into the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. See if management have their own wealth at stake, by checking insider shareholdings in Whirlpool of India stock. We have also put together a list of global stocks with a solid dividend.

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