Mayur Uniquoters (NSE:MAYURUNIQ) Is Due To Pay A Dividend Of ₹2.00

Mayur Uniquoters Limited (NSE:MAYURUNIQ) will pay a dividend of ₹2.00 on the 28th of August. This payment means the dividend yield will be 0.6%, which is below the average for the industry.

Check out our latest analysis for Mayur Uniquoters

Mayur Uniquoters' Dividend Is 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. Mayur Uniquoters 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.

The next year is set to see EPS grow by 54.5%. If the dividend continues on this path, the payout ratio could be 5.8% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2012, the first annual payment was ₹2.25, compared to the most recent full-year payment of ₹2.00. The dividend has shrunk at around 1.2% a year during that period. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

Mayur Uniquoters May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Earnings has been rising at 3.9% per annum over the last five years, which admittedly is a bit slow. While growth may be thin on the ground, Mayur Uniquoters could always pay out a higher proportion of earnings to increase shareholder returns.

Our Thoughts On Mayur Uniquoters' Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Mayur Uniquoters is earning enough to cover the payments, the cash flows are lacking. We don't think Mayur Uniquoters is a great stock to add to your portfolio if income is your focus.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 2 warning signs for Mayur Uniquoters (of which 1 shouldn't be ignored!) you should know about. Is Mayur Uniquoters not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.