Lincoln Pharmaceuticals' (NSE:LINCOLN) Dividend Will Be Increased To ₹1.80

Lincoln Pharmaceuticals Limited (NSE:LINCOLN) will increase its dividend from last year's comparable payment on the 30th of October to ₹1.80. Although the dividend is now higher, the yield is only 0.2%, which is below the industry average.

View our latest analysis for Lincoln Pharmaceuticals

Lincoln Pharmaceuticals' Projected Earnings Seem Likely To Cover Future Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Lincoln Pharmaceuticals' dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 16.7% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 3.3% by next year, which is in a pretty sustainable range.

Lincoln Pharmaceuticals Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from ₹0.60 total annually to ₹1.80. This means that it has been growing its distributions at 12% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Lincoln Pharmaceuticals has grown earnings per share at 17% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Lincoln Pharmaceuticals' Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. See if management have their own wealth at stake, by checking insider shareholdings in Lincoln Pharmaceuticals stock. Is Lincoln Pharmaceuticals 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.