Jeena Sikho Lifecare (NSE:JSLL) Will Pay A Larger Dividend Than Last Year At ₹4.18

Jeena Sikho Lifecare Limited (NSE:JSLL) has announced that it will be increasing its dividend from last year's comparable payment on the 1st of January to ₹4.18. Although the dividend is now higher, the yield is only 0.4%, which is below the industry average.

View our latest analysis for Jeena Sikho Lifecare

Jeena Sikho Lifecare's 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. However, prior to this announcement, Jeena Sikho Lifecare's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 53.2% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 9.8% by next year, which is in a pretty sustainable range.

Jeena Sikho Lifecare Is Still Building Its Track Record

It's not possible for us to make a backward looking judgement just based on a short payment history. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Jeena Sikho Lifecare has impressed us by growing EPS at 53% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like Jeena Sikho Lifecare's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

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. Just as an example, we've come across 3 warning signs for Jeena Sikho Lifecare you should be aware of, and 1 of them is a bit unpleasant. Is Jeena Sikho Lifecare 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.

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