Repco Home Finance's (NSE:REPCOHOME) Dividend Will Be ₹2.50

Repco Home Finance Limited (NSE:REPCOHOME) will pay a dividend of ₹2.50 on the 23rd of October. The dividend yield will be 0.8% based on this payment which is still above the industry average.

View our latest analysis for Repco Home Finance

Repco Home Finance's Payment Has Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, Repco Home Finance's earnings easily 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 36.4% over the next year. If the dividend continues on this path, the payout ratio could be 4.7% by next year, which we think can be pretty sustainable going forward.

Repco Home Finance Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from ₹1.10 in 2013 to the most recent annual payment of ₹2.50. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

We Could See Repco Home Finance's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Repco Home Finance has seen EPS rising for the last five years, at 10.0% per annum. Repco Home Finance definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Repco Home Finance Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 4 warning signs for Repco Home Finance you should be aware of, and 1 of them can't be ignored. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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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.
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