Matrimony.com's (NSE:MATRIMONY) Shareholders Will Receive A Bigger Dividend Than Last Year

Matrimony.com Limited (NSE:MATRIMONY) will increase its dividend from last year's comparable payment on the 11th of September to ₹5.00. The payment will take the dividend yield to 0.6%, which is in line with the average for the industry.

Check out our latest analysis for Matrimony.com

Matrimony.com's Dividend Is Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Matrimony.com's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 75.9%. Assuming the dividend continues along recent trends, we think the payout ratio could be 16% by next year, which is in a pretty sustainable range.

Matrimony.com Doesn't Have A Long Payment History

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The dividend has gone from an annual total of ₹1.50 in 2018 to the most recent total annual payment of ₹5.00. This means that it has been growing its distributions at 35% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Matrimony.com 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, Matrimony.com's EPS was effectively flat over the past five years, which could stop the company from paying more every year. While growth may be thin on the ground, Matrimony.com could always pay out a higher proportion of earnings to increase shareholder returns.

Our Thoughts On Matrimony.com's Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Matrimony.com that investors should know about before committing capital to this stock. Is Matrimony.com not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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