Mindteck (India) (NSE:MINDTECK) Has Affirmed Its Dividend Of ₹1.00

Mindteck (India) Limited (NSE:MINDTECK) has announced that it will pay a dividend of ₹1.00 per share on the 10th of September. This means the annual payment will be 0.7% of the current stock price, which is lower than the industry average.

View our latest analysis for Mindteck (India)

Mindteck (India)'s Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Mindteck (India) was easily earning enough to cover the dividend. 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 36.9% if recent trends continue. If the dividend continues on this path, the payout ratio could be 8.7% by next year, which we think can be pretty sustainable going forward.

Mindteck (India)'s Dividend Has Lacked Consistency

Even in its relatively short history, the company has reduced the dividend at least once. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. The last annual payment of ₹1.00 was flat on the annual payment from9 years ago. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Mindteck (India) has impressed us by growing EPS at 37% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like Mindteck (India)'s Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 4 warning signs for Mindteck (India) that you should be aware of before investing. Is Mindteck (India) not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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