India Pesticides Limited's (NSE:IPL) investors are due to receive a payment of ₹0.75 per share on 19th of September. The dividend yield is 0.4% based on this payment, which is a little bit low compared to the other companies in the industry.
View our latest analysis for India Pesticides
India Pesticides' Earnings Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive. However, India Pesticides' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Over the next year, EPS is forecast to expand by 180.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 1.0% by next year, which is in a pretty sustainable range.
India Pesticides Doesn't Have A Long Payment History
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 2 years, which isn't that long in the grand scheme of things. The most recent annual payment of ₹0.75 is about the same as the annual payment 2 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.
The Dividend Has Growth Potential
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. India Pesticides has seen EPS rising for the last five years, at 5.8% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for India Pesticides' prospects of growing its dividend payments in the future.
Our Thoughts On India Pesticides' Dividend
Overall, we think India Pesticides is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for India Pesticides that investors should know about before committing capital to this stock. Is India Pesticides not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
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About NSEI:IPL
Flawless balance sheet second-rate dividend payer.
