Indo Borax & Chemicals (NSE:INDOBORAX) Has Affirmed Its Dividend Of ₹1.00

Indo Borax & Chemicals Limited's (NSE:INDOBORAX) investors are due to receive a payment of ₹1.00 per share on 26th of September. This means the annual payment will be 0.5% of the current stock price, which is lower than the industry average.

See our latest analysis for Indo Borax & Chemicals

Indo Borax & Chemicals' Dividend Is Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Indo Borax & Chemicals was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 17.3% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 8.7%, which is in the range that makes us comfortable with the sustainability of the dividend.

Indo Borax & Chemicals Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the annual payment back then was ₹0.15, compared to the most recent full-year payment of ₹1.00. This means that it has been growing its distributions at 21% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Indo Borax & Chemicals has been growing its earnings per share at 17% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Indo Borax & Chemicals Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Indo Borax & Chemicals might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. For example, we've picked out 1 warning sign for Indo Borax & Chemicals that investors should know about before committing capital to this stock. 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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