CyberTech Systems and Software (NSE:CYBERTECH) Is Increasing Its Dividend To ₹2.00

The board of CyberTech Systems and Software Limited (NSE:CYBERTECH) has announced that it will be paying its dividend of ₹2.00 on the 20th of October, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 1.5%.

See our latest analysis for CyberTech Systems and Software

CyberTech Systems and Software's Payment Has Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, prior to this announcement, CyberTech Systems and Software'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 56.4% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 18% by next year, which is in a pretty sustainable range.

CyberTech Systems and Software Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was ₹1.00, compared to the most recent full-year payment of ₹2.00. This works out to be a compound annual growth rate (CAGR) of approximately 7.2% a year over that time. 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

The company's investors will be pleased to have been receiving dividend income for some time. CyberTech Systems and Software has impressed us by growing EPS at 56% per year over the past five years. 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.

CyberTech Systems and Software Looks Like A Great Dividend Stock

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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for CyberTech Systems and Software that investors should take into consideration. Is CyberTech Systems and Software not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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