Lincoln Pharmaceuticals' (NSE:LINCOLN) Dividend Will Be ₹1.50

Lincoln Pharmaceuticals Limited (NSE:LINCOLN) will pay a dividend of ₹1.50 on the 30th of October. This payment means the dividend yield will be 0.5%, which is below the average for the industry.

See our latest analysis for Lincoln Pharmaceuticals

Lincoln Pharmaceuticals' Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, Lincoln Pharmaceuticals' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 24.9% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 3.8%, which is in the range that makes us comfortable with the sustainability of the dividend.

Lincoln Pharmaceuticals Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the dividend has gone from ₹0.60 total annually to ₹1.50. This implies that the company grew its distributions at a yearly rate of about 9.6% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Lincoln Pharmaceuticals has impressed us by growing EPS at 25% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like Lincoln Pharmaceuticals' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Lincoln Pharmaceuticals that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.