Fine Organic Industries (NSE:FINEORG) Is Increasing Its Dividend To ₹10.00

Fine Organic Industries Limited's (NSE:FINEORG) dividend will be increasing from last year's payment of the same period to ₹10.00 on 20th of September. This takes the annual payment to 0.2% of the current stock price, which unfortunately is below what the industry is paying.

View our latest analysis for Fine Organic Industries

Fine Organic Industries' Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, Fine Organic Industries' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 39.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 5.6% by next year, which is in a pretty sustainable range.

Fine Organic Industries' Dividend Has Lacked Consistency

It's comforting to see that Fine Organic Industries has been paying a dividend for a number of years now, however it has been cut at least once in that time. This suggests that the dividend might not be the most reliable. Since 2018, the annual payment back then was ₹7.00, compared to the most recent full-year payment of ₹10.00. This works out to be a compound annual growth rate (CAGR) of approximately 6.1% a year over that time. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Fine Organic Industries has seen EPS rising for the last five years, at 25% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Fine Organic Industries Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for Fine Organic Industries for free with public analyst estimates for the company. 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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