Ganesh Housing's (NSE:GANESHHOUC) Dividend Will Be Increased To ₹11.00

Ganesh Housing Corporation Limited (NSE:GANESHHOUC) will increase its dividend from last year's comparable payment on the 9th of October to ₹11.00. This takes the dividend yield to 1.1%, which shareholders will be pleased with.

Check out our latest analysis for Ganesh Housing

Ganesh Housing's Payment Has Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, prior to this announcement, Ganesh Housing's 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 59.2% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 15%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was ₹1.73 in 2014, and the most recent fiscal year payment was ₹11.00. This implies that the company grew its distributions at a yearly rate of about 20% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Ganesh Housing has seen EPS rising for the last five years, at 59% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like Ganesh Housing'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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Ganesh Housing that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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