Hisar Metal Industries (NSE:HISARMETAL) Has Announced A Dividend Of ₹1.00

Hisar Metal Industries Limited's (NSE:HISARMETAL) investors are due to receive a payment of ₹1.00 per share on 23rd of October. The dividend yield is 0.8% based on this payment, which is a little bit low compared to the other companies in the industry.

See our latest analysis for Hisar Metal Industries

Hisar Metal Industries' Dividend Is Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, Hisar Metal Industries' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 34.7% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 2.9%, which is in the range that makes us comfortable with the sustainability of the dividend.

Hisar Metal Industries Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2012, the dividend has gone from ₹0.667 total annually to ₹1.00. This works out to be a compound annual growth rate (CAGR) of approximately 4.1% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Hisar Metal Industries has seen EPS rising for the last five years, at 35% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Hisar Metal Industries Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Hisar Metal Industries might even raise payments in the future. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 3 warning signs for Hisar Metal Industries that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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