Ingles Markets (NASDAQ:IMKT.A) Has Affirmed Its Dividend Of $0.165

Ingles Markets, Incorporated (NASDAQ:IMKT.A) has announced that it will pay a dividend of $0.165 per share on the 17th of October. This means the annual payment will be 1.1% of the current stock price, which is lower than the industry average.

See our latest analysis for Ingles Markets

Ingles Markets' Projected Earnings Seem Likely To Cover Future Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Before making this announcement, Ingles Markets was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

If the trend of the last few years continues, EPS will grow by 16.6% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 6.7% by next year, which is in a pretty sustainable range.

Ingles Markets Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The last annual payment of $0.66 was flat on the annual payment from10 years ago. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Ingles Markets has grown earnings per share at 17% per year over the past five years. Ingles Markets definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Ingles Markets' Dividend

Overall, we like to see the dividend staying consistent, and we think Ingles Markets might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Ingles Markets that investors need to be conscious of moving forward. Is Ingles Markets not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.