- India
- /
- Consumer Finance
- /
- NSEI:CHOLAFIN
Cholamandalam Investment and Finance (NSE:CHOLAFIN) Is Due To Pay A Dividend Of ₹0.70
Cholamandalam Investment and Finance Company Limited's (NSE:CHOLAFIN) investors are due to receive a payment of ₹0.70 per share on 29th of August. This means the annual payment will be 0.1% of the current stock price, which is lower than the industry average.
Cholamandalam Investment and Finance's Payment Could Potentially Have Solid Earnings Coverage
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Based on the last payment, Cholamandalam Investment and Finance was earning enough to cover the dividend, but free cash flows weren't positive. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.
Looking forward, earnings per share is forecast to rise by 90.1% over the next year. If the dividend continues on this path, the payout ratio could be 2.3% by next year, which we think can be pretty sustainable going forward.
View our latest analysis for Cholamandalam Investment and Finance
Cholamandalam Investment and Finance Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was ₹0.70, compared to the most recent full-year payment of ₹2.00. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
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. We are encouraged to see that Cholamandalam Investment and Finance has grown earnings per share at 30% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.
Our Thoughts On Cholamandalam Investment and Finance's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. Overall, we don't think this company has the makings of a good income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 2 warning signs for Cholamandalam Investment and Finance that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
New: AI Stock Screener & Alerts
Our new AI Stock Screener scans the market every day to uncover opportunities.
• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies
Or build your own from over 50 metrics.
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:CHOLAFIN
Cholamandalam Investment and Finance
Operates as a non-banking finance company in India.
High growth potential second-rate dividend payer.
Similar Companies
Market Insights
Community Narratives


