Qatar Islamic Insurance Group Q.P.S.C (DSM:QISI) Has Affirmed Its Dividend Of QAR0.50

The board of Qatar Islamic Insurance Group Q.P.S.C. (DSM:QISI) has announced that it will pay a dividend on the 1st of January, with investors receiving QAR0.50 per share. This payment means that the dividend yield will be 5.6%, which is around the industry average.

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Qatar Islamic Insurance Group Q.P.S.C's Payment Could Potentially Have Solid Earnings Coverage

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. The last dividend was quite easily covered by Qatar Islamic Insurance Group Q.P.S.C's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

If the trend of the last few years continues, EPS will grow by 14.6% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 47%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Qatar Islamic Insurance Group Q.P.S.C

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was QAR0.40 in 2015, and the most recent fiscal year payment was QAR0.50. This means that it has been growing its distributions at 2.3% per annum over that time. 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

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that Qatar Islamic Insurance Group Q.P.S.C has been growing its earnings per share at 15% a year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like Qatar Islamic Insurance Group Q.P.S.C's Dividend

Overall, we like to see the dividend staying consistent, and we think Qatar Islamic Insurance Group Q.P.S.C might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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 instance, we've picked out 1 warning sign for Qatar Islamic Insurance Group Q.P.S.C that investors should take into consideration. Is Qatar Islamic Insurance Group 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.