QMS Medical Allied Services (NSE:QMSMEDI) Has Affirmed Its Dividend Of ₹0.50

The board of QMS Medical Allied Services Limited (NSE:QMSMEDI) has announced that it will pay a dividend on the 27th of October, with investors receiving ₹0.50 per share. This means the annual payment is 0.4% of the current stock price, which is above the average for the industry.

View our latest analysis for QMS Medical Allied Services

QMS Medical Allied Services' Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, QMS Medical Allied Services' earnings easily covered the dividend, but free cash flows were negative. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.

If the trend of the last few years continues, EPS will grow by 19.9% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 8.3%, which is in the range that makes us comfortable with the sustainability of the dividend.

QMS Medical Allied Services Is Still Building Its Track Record

It's not possible for us to make a backward looking judgement just based on a short payment history. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. QMS Medical Allied Services has seen EPS rising for the last five years, at 20% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Our Thoughts On QMS Medical Allied Services' Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 5 warning signs for QMS Medical Allied Services you should be aware of, and 2 of them make us uncomfortable. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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