Saksoft (NSE:SAKSOFT) Has Affirmed Its Dividend Of ₹0.40

The board of Saksoft Limited (NSE:SAKSOFT) has announced that it will pay a dividend of ₹0.40 per share on the 11th of December. The dividend yield is 0.3% based on this payment, which is a little bit low compared to the other companies in the industry.

See our latest analysis for Saksoft

Saksoft's Projected Earnings Seem Likely To Cover Future Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, Saksoft'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.

If the trend of the last few years continues, EPS will grow by 19.6% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 9.6%, which is in the range that makes us comfortable with the sustainability of the dividend.

Saksoft Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ₹0.20, compared to the most recent full-year payment of ₹0.64. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Saksoft has impressed us by growing EPS at 20% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Saksoft's prospects of growing its dividend payments in the future.

We Really Like Saksoft's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Are management backing themselves to deliver performance? Check their shareholdings in Saksoft in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.