Masraf Al Rayan (Q.P.S.C.) (DSM:MARK) Has Affirmed Its Dividend Of QAR0.10

Masraf Al Rayan (Q.P.S.C.)'s (DSM:MARK) investors are due to receive a payment of QAR0.10 per share on 1st of January. This means that the annual payment will be 4.0% of the current stock price, which is in line with the average for the industry.

View our latest analysis for Masraf Al Rayan (Q.P.S.C.)

Masraf Al Rayan (Q.P.S.C.)'s Earnings Will Easily Cover The Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Having distributed dividends for at least 10 years, Masraf Al Rayan (Q.P.S.C.) has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Masraf Al Rayan (Q.P.S.C.)'s payout ratio of 66% is a good sign as this means that earnings decently cover dividends.

Over the next 3 years, EPS is forecast to expand by 34.9%. Analysts forecast the future payout ratio could be 66% over the same time horizon, which is a number we think the company can maintain.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2014, the annual payment back then was QAR0.15, compared to the most recent full-year payment of QAR0.10. This works out to be a decline of approximately 4.0% per year over that time. A company that decreases its dividend over time generally isn't what we are looking for.

Dividend Growth Potential Is Shaky

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Over the past five years, it looks as though Masraf Al Rayan (Q.P.S.C.)'s EPS has declined at around 12% a year. Dividend payments are likely to come under some pressure unless EPS can pull out of the nosedive it is in. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.

Our Thoughts On Masraf Al Rayan (Q.P.S.C.)'s Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Masraf Al Rayan (Q.P.S.C.) is earning enough to cover the dividend, we are generally unimpressed with its future prospects. This company is not in the top tier of income providing stocks.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Masraf Al Rayan (Q.P.S.C.) that investors should know about before committing capital to this stock. Is Masraf Al Rayan (Q.P.S.C.) not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.