Bhansali Engineering Polymers (NSE:BEPL) Has Affirmed Its Dividend Of ₹1.00

Bhansali Engineering Polymers Limited's (NSE:BEPL) investors are due to receive a payment of ₹1.00 per share on 10th of November. This means the annual payment is 2.7% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Bhansali Engineering Polymers

Bhansali Engineering Polymers Is Paying Out More Than It Is Earning

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last dividend was quite easily covered by Bhansali Engineering Polymers' earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS could expand by 6.9% if the company continues along the path it has been on recently. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 358% over the next year.

Bhansali Engineering Polymers Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ₹0.0667 in 2013, and the most recent fiscal year payment was ₹2.33. This means that it has been growing its distributions at 43% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

We Could See Bhansali Engineering Polymers' Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Bhansali Engineering Polymers has seen EPS rising for the last five years, at 6.9% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Bhansali Engineering Polymers Looks Like A Great Dividend Stock

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. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Bhansali Engineering Polymers that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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