Lincoln Pharmaceuticals (NSE:LINCOLN) Will Pay A Dividend Of ₹1.80

The board of Lincoln Pharmaceuticals Limited (NSE:LINCOLN) has announced that it will pay a dividend of ₹1.80 per share on the 30th of October. Including this payment, the dividend yield on the stock will be 0.3%, which is a modest boost for shareholders' returns.

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Lincoln Pharmaceuticals' Future Dividend Projections Appear 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, 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.

If the trend of the last few years continues, EPS will grow by 9.8% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 4.0% by next year, which is in a pretty sustainable range.

See our latest analysis for Lincoln Pharmaceuticals

Lincoln Pharmaceuticals Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of ₹1.00 in 2015 to the most recent total annual payment of ₹1.80. This works out to be a compound annual growth rate (CAGR) of approximately 6.1% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

We Could See Lincoln Pharmaceuticals' Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Lincoln Pharmaceuticals has been growing its earnings per share at 9.8% a 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.

Lincoln Pharmaceuticals Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Lincoln Pharmaceuticals might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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. Now, if you want to look closer, it would be worth checking out our free research on Lincoln Pharmaceuticals management tenure, salary, and performance. 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.