Hatsun Agro Product Limited (NSE:HATSUN) Passed Our Checks, And It's About To Pay A ₹6.00 Dividend

Hatsun Agro Product Limited (NSE:HATSUN) is about to trade ex-dividend in the next three days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Hatsun Agro Product's shares before the 27th of July in order to be eligible for the dividend, which will be paid on the 18th of August.

The company's next dividend payment will be ₹6.00 per share, and in the last 12 months, the company paid a total of ₹6.00 per share. Looking at the last 12 months of distributions, Hatsun Agro Product has a trailing yield of approximately 0.6% on its current stock price of ₹1064.15. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Hatsun Agro Product has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Hatsun Agro Product

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Hatsun Agro Product paid out more than half (69%) of its earnings last year, which is a regular payout ratio for most companies.

Click here to see how much of its profit Hatsun Agro Product paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Hatsun Agro Product's earnings per share have been growing at 14% a year for the past five years. Hatsun Agro Product is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Hatsun Agro Product has lifted its dividend by approximately 27% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Is Hatsun Agro Product an attractive dividend stock, or better left on the shelf? Earnings per share are growing nicely, and Hatsun Agro Product is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, Hatsun Agro Product looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Hatsun Agro Product has an appealing dividend, it's worth knowing the risks involved with this stock. We've identified 3 warning signs with Hatsun Agro Product (at least 1 which makes us a bit uncomfortable), and understanding these should be part of your investment process.

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.