Crest Ventures Limited (NSE:CREST) will pay a dividend of ₹1.00 on the 30th of September. The dividend yield is 0.2% based on this payment, which is a little bit low compared to the other companies in the industry.
View our latest analysis for Crest Ventures
Crest Ventures' Earnings Easily Cover The Distributions
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Crest Ventures is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.
Over the next year, EPS could expand by 4.5% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 4.7% by next year, which is in a pretty sustainable range.
Crest Ventures Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ₹0.50 in 2014 to the most recent total annual payment of ₹1.00. This means that it has been growing its distributions at 7.2% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend's Growth Prospects Are Limited
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, Crest Ventures has only grown its earnings per share at 4.5% per annum over the past five years. While EPS growth is quite low, Crest Ventures has the option to increase the payout ratio to return more cash to shareholders.
Our Thoughts On Crest Ventures' Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Crest Ventures' payments, as there could be some issues with sustaining them into the future. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. This company is not in the top tier of income providing stocks.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Crest Ventures that you should be aware of before investing. Is Crest Ventures not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
About NSEI:CREST
Solid track record with adequate balance sheet.
