Stock Analysis

MPS (NSE:MPSLTD) Is Paying Out A Larger Dividend Than Last Year

NSEI:MPSLTD
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MPS Limited's (NSE:MPSLTD) dividend will be increasing from last year's payment of the same period to ₹50.00 on 28th of September. This takes the dividend yield to 3.1%, which shareholders will be pleased with.

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MPS' Future Dividend Projections Appear Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. At the time of the last dividend payment, MPS was paying out a very large proportion of what it was earning and 153% of cash flows. This is certainly a risk factor, as reduced cash flows could force the company to pay a lower dividend.

EPS is set to grow by 36.5% over the next year. Assuming the dividend continues along recent trends, our estimates say the payout ratio could reach 79% - on the higher side, but we wouldn't necessarily say this is unsustainable.

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NSEI:MPSLTD Historic Dividend July 9th 2025

View our latest analysis for MPS

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 2015, the dividend has gone from ₹24.00 total annually to ₹83.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. MPS has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

MPS' Dividend Might Lack Growth

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. We are encouraged to see that MPS has grown earnings per share at 22% per year over the past five years. Fast growing earnings are great, but this can rarely be sustained without some reinvestment into the business, which MPS hasn't been doing.

The Dividend Could Prove To Be Unreliable

Overall, we always like to see the dividend being raised, but we don't think MPS will make a great income stock. In general, the distributions are a little bit higher than we would like, but we can't ignore the fact the quickly growing earnings gives this stock great potential in the future. Overall, we don't think this company has the makings of a good income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for MPS that investors need to be conscious of moving forward. 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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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.

About NSEI:MPSLTD

MPS

Provides platforms and services for content creation, full-service production, and distribution to the publishers, learning companies, corporate institutions, libraries, and content aggregators in India, Europe, the United States, and internationally.

Flawless balance sheet with solid track record.

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