Riyadh Cables Group (TADAWUL:4142) Is Due To Pay A Dividend Of SAR2.00

Riyadh Cables Group Company (TADAWUL:4142) has announced that it will pay a dividend of SAR2.00 per share on the 14th of October. This takes the dividend yield to 3.3%, which shareholders will be pleased with.

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Riyadh Cables Group's Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. But before making this announcement, Riyadh Cables Group's earnings quite easily covered the dividend. The business is returning a large chunk of its cash to shareholders, which means it is not being used to grow the business.

Over the next year, EPS is forecast to expand by 7.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 55%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for Riyadh Cables Group

Riyadh Cables Group Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The annual payment during the last 2 years was SAR1.50 in 2023, and the most recent fiscal year payment was SAR4.00. This implies that the company grew its distributions at a yearly rate of about 63% over that duration. Riyadh Cables Group has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Riyadh Cables Group has grown earnings per share at 36% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Our Thoughts On Riyadh Cables Group's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While Riyadh Cables Group 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for Riyadh Cables Group for free with public analyst estimates for the company. Is Riyadh Cables Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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