Saudi Telecom (TADAWUL:7010) Has Announced A Dividend Of ر.س1.00

Saudi Telecom Company (TADAWUL:7010) has announced that it will pay a dividend of ر.س1.00 per share on the 18th of November. This means the dividend yield will be fairly typical at 4.3%.

See our latest analysis for Saudi Telecom

Saudi Telecom's Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. Before making this announcement, Saudi Telecom was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 9.2%. If the dividend continues growing along recent trends, we estimate the payout ratio could reach 80%, which is on the higher side, but certainly still feasible.

Saudi Telecom Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2011, the first annual payment was ر.س3.00, compared to the most recent full-year payment of ر.س4.00. This implies that the company grew its distributions at a yearly rate of about 2.9% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

Saudi Telecom Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Saudi Telecom has impressed us by growing EPS at 5.4% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Saudi Telecom's prospects of growing its dividend payments in the future.

Saudi Telecom Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Saudi Telecom might even raise payments in the future. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Saudi Telecom that investors should know about before committing capital to this stock. We have also put together a list of global stocks with a solid dividend.

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.

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