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Apollo Sindoori Hotels Limited (NSE:APOLSINHOT) is about to trade ex-dividend in the next 3 days. Investors can purchase shares before the 16th of July in order to be eligible for this dividend, which will be paid on the 24th of August.
Apollo Sindoori Hotels's next dividend payment will be ₹3.00 per share, on the back of last year when the company paid a total of ₹3.00 to shareholders. Based on the last year's worth of payments, Apollo Sindoori Hotels has a trailing yield of 0.3% on the current stock price of ₹869.1. If you buy this business for its dividend, you should have an idea of whether Apollo Sindoori Hotels's dividend is reliable and sustainable. So we need to investigate whether Apollo Sindoori Hotels can afford its dividend, and if the dividend could grow.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Apollo Sindoori Hotels is paying out just 3.8% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. The good news is it paid out just 3.4% of its free cash flow in the last year.
It's positive to see that Apollo Sindoori Hotels's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Apollo Sindoori Hotels's earnings have been skyrocketing, up 59% per annum for the past five years.
Apollo Sindoori Hotels looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 4 years ago, Apollo Sindoori Hotels has lifted its dividend by approximately 19% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
From a dividend perspective, should investors buy or avoid Apollo Sindoori Hotels? It's great that Apollo Sindoori Hotels is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. Apollo Sindoori Hotels looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
Want to learn more about Apollo Sindoori Hotels's dividend performance? Check out this visualisation of its historical revenue and earnings growth.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.