Stock Analysis

Angel One (NSE:ANGELONE) Has Announced That It Will Be Increasing Its Dividend To ₹7.65

NSEI:ANGELONE
Source: Shutterstock

The board of Angel One Limited (NSE:ANGELONE) has announced that it will be paying its dividend of ₹7.65 on the 13th of August, an increased payment from last year's comparable dividend. The payment will take the dividend yield to 2.9%, which is in line with the average for the industry.

View our latest analysis for Angel One

Angel One's Earnings Easily Cover the Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Angel One 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 is forecast to rise by 54.3% over the next year. If the dividend continues on this path, the payout ratio could be 33% by next year, which we think can be pretty sustainable going forward.

historic-dividend
NSEI:ANGELONE Historic Dividend July 18th 2022

Angel One Doesn't Have A Long Payment History

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The annual payment during the last 2 years was ₹4.15 in 2020, and the most recent fiscal year payment was ₹37.00. This works out to be a compound annual growth rate (CAGR) of approximately 199% a year 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.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Angel One has seen EPS rising for the last five years, at 80% per annum. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like Angel One's Dividend

Overall, a dividend increase is always good, and we think that Angel One is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 3 warning signs for Angel One (1 is a bit unpleasant!) that you should be aware of before investing. Is Angel One not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

About NSEI:ANGELONE

Angel One

Provides broking and advisory services, margin funding, loans against shares, and financial products to its clients in India.

Good value with adequate balance sheet.

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