Wipro (NSE:WIPRO) Will Pay A Dividend Of ₹1.00

Wipro Limited (NSE:WIPRO) has announced that it will pay a dividend of ₹1.00 per share on the 10th of February. The dividend yield is 0.2% based on this payment, which is a little bit low compared to the other companies in the industry.

Check out our latest analysis for Wipro

Wipro's Dividend Is Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Wipro's 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.

Looking forward, earnings per share is forecast to rise by 27.9% over the next year. If the dividend continues on this path, the payout ratio could be 3.5% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from an annual total of ₹2.25 in 2014 to the most recent total annual payment of ₹1.00. The dividend has shrunk at around 7.8% a year during that period. A company that decreases its dividend over time generally isn't what we are looking for.

We Could See Wipro's Dividend Growing

Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. Wipro has seen EPS rising for the last five years, at 9.3% per annum. 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.

Wipro Looks Like A Great Dividend Stock

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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 36 analysts we track are forecasting for Wipro for free with public analyst estimates for the company. Is Wipro not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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