Maithan Alloys (NSE:MAITHANALL) Is Due To Pay A Dividend Of ₹6.00

Maithan Alloys Limited (NSE:MAITHANALL) has announced that it will pay a dividend of ₹6.00 per share on the 26th of October. This means the annual payment will be 0.5% of the current stock price, which is lower than the industry average.

View our latest analysis for Maithan Alloys

Maithan Alloys' Earnings Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, Maithan Alloys' earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 3.1% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 5.7% by next year, which is in a pretty sustainable range.

Maithan Alloys Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was ₹1.00, compared to the most recent full-year payment of ₹6.00. This means that it has been growing its distributions at 20% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Maithan Alloys May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, Maithan Alloys has only grown its earnings per share at 3.1% per annum over the past five years. While EPS growth is quite low, Maithan Alloys has the option to increase the payout ratio to return more cash to shareholders.

Maithan Alloys Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Maithan Alloys might even raise payments in the future. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Maithan Alloys that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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