Here's What We Like About CRISIL's (NSE:CRISIL) Upcoming Dividend

CRISIL Limited (NSE:CRISIL) stock is about to trade ex-dividend in three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase CRISIL's shares before the 30th of October in order to receive the dividend, which the company will pay on the 13th of November.

The company's next dividend payment will be ₹15.00 per share, on the back of last year when the company paid a total of ₹54.00 to shareholders. Based on the last year's worth of payments, CRISIL stock has a trailing yield of around 1.1% on the current share price of ₹5080.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether CRISIL can afford its dividend, and if the dividend could grow.

Check out our latest analysis for CRISIL

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. CRISIL is paying out an acceptable 63% of its profit, a common payout level among most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, CRISIL's earnings per share have been growing at 13% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. CRISIL has delivered 11% dividend growth per year on average over the past 10 years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Is CRISIL an attractive dividend stock, or better left on the shelf? Earnings per share are growing at an attractive rate, and CRISIL is paying out a bit over half its profits. In summary, CRISIL appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

Curious what other investors think of CRISIL? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

If you're in the market for strong dividend payers, we recommend checking 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.