SIL Investments Limited (NSE:SILINV) has announced that it will pay a dividend of ₹2.50 per share on the 29th of September. Including this payment, the dividend yield on the stock will be 0.8%, which is a modest boost for shareholders' returns.
See our latest analysis for SIL Investments
SIL Investments' Earnings Easily Cover The Distributions
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. However, SIL Investments' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
If the trend of the last few years continues, EPS will grow by 0.3% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 14% by next year, which is in a pretty sustainable range.
SIL Investments Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2012, the dividend has gone from ₹1.25 total annually to ₹2.50. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
SIL Investments May Find It Hard To Grow The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. However, SIL Investments' EPS was effectively flat over the past five years, which could stop the company from paying more every year. While EPS growth is quite low, SIL Investments has the option to increase the payout ratio to return more cash to shareholders.
We Really Like SIL Investments' Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, SIL Investments has 4 warning signs (and 1 which can't be ignored) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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:SILINV
SIL Investments
A non-banking financial company, engages in the investment and lending activities in India.
Excellent balance sheet average dividend payer.
