Maharah for Human Resources (TADAWUL:1831) Will Pay A Larger Dividend Than Last Year At SAR0.08

Maharah for Human Resources Company (TADAWUL:1831) has announced that it will be increasing its dividend from last year's comparable payment on the 24th of April to SAR0.08. This will take the annual payment to 2.5% of the stock price, which is above what most companies in the industry pay.

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Maharah for Human Resources' Projected Earnings Seem Likely To Cover Future Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last payment was quite easily covered by earnings, but it made up 174% of cash flows. This signals that the company is more focused on returning cash flow to shareholders, but it could mean that the dividend is exposed to cuts in the future.

Looking forward, EPS could fall by 14.1% if the company can't turn things around from the last few years. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 63%, which is definitely feasible to continue.

See our latest analysis for Maharah for Human Resources

Maharah for Human Resources' Dividend Has Lacked Consistency

It's comforting to see that Maharah for Human Resources has been paying a dividend for a number of years now, however it has been cut at least once in that time. This makes us cautious about the consistency of the dividend over a full economic cycle. The dividend has gone from an annual total of SAR0.445 in 2020 to the most recent total annual payment of SAR0.145. The dividend has fallen 67% over that period. A company that decreases its dividend over time generally isn't what we are looking for.

Dividend Growth Potential Is Shaky

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. Over the past five years, it looks as though Maharah for Human Resources' EPS has declined at around 14% a year. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

Maharah for Human Resources' Dividend Doesn't Look Sustainable

In summary, while it's always good to see the dividend being raised, we don't think Maharah for Human Resources' payments are rock solid. While Maharah for Human Resources is earning enough to cover the payments, the cash flows are lacking. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Maharah for Human Resources (1 is concerning!) that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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