Sandesh (NSE:SANDESH) Is Paying Out A Dividend Of ₹5.00

The board of The Sandesh Limited (NSE:SANDESH) has announced that it will pay a dividend of ₹5.00 per share on the 7th of March. Including this payment, the dividend yield on the stock will be 0.6%, which is a modest boost for shareholders' returns.

View our latest analysis for Sandesh

Sandesh's Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Sandesh was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 7.6% if recent trends continue. If the dividend continues on this path, the payout ratio could be 2.8% by next year, which we think can be pretty sustainable going forward.

Sandesh Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from ₹3.50 total annually to ₹5.00. This implies that the company grew its distributions at a yearly rate of about 3.6% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

Sandesh Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Sandesh has been growing its earnings per share at 7.6% a year over the past five years. Sandesh definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Sandesh Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 2 warning signs for Sandesh (of which 1 is a bit unpleasant!) you should know about. Is Sandesh 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.