Indo Amines (NSE:INDOAMIN) Is Paying Out A Dividend Of ₹0.50

Indo Amines Limited (NSE:INDOAMIN) will pay a dividend of ₹0.50 on the 23rd of October. This payment means the dividend yield will be 0.4%, which is below the average for the industry.

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Indo Amines' Future Dividend Projections Appear Well Covered By Earnings

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Indo Amines is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. 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 45.4% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 4.0% by next year, which is in a pretty sustainable range.

View our latest analysis for Indo Amines

Indo Amines Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ₹0.25 total annually to ₹0.50. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Indo Amines has impressed us by growing EPS at 45% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

In Summary

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Indo Amines' payments, as there could be some issues with sustaining them into the future. While Indo Amines is earning enough to cover the payments, the cash flows are lacking. We don't think Indo Amines is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Indo Amines has 2 warning signs (and 1 which is concerning) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.