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Income Investors Should Know That JSW Steel Limited (NSE:JSWSTEEL) Goes Ex-Dividend Soon

Simply Wall St · 07/04 00:16

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that JSW Steel Limited (NSE:JSWSTEEL) is about to go ex-dividend in just three days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase JSW Steel's shares on or after the 8th of July, you won't be eligible to receive the dividend, when it is paid on the 24th of August.

The company's upcoming dividend is ₹2.80 a share, following on from the last 12 months, when the company distributed a total of ₹2.80 per share to shareholders. Calculating the last year's worth of payments shows that JSW Steel has a trailing yield of 0.3% on the current share price of ₹1046.10. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. JSW Steel paid out just 19% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether JSW Steel generated enough free cash flow to afford its dividend. It paid out 22% of its free cash flow as dividends last year, which is conservatively low.

It's positive to see that JSW Steel'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.

Check out our latest analysis for JSW Steel

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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NSEI:JSWSTEEL Historic Dividend July 4th 2025

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's not ideal to see JSW Steel's earnings per share have been shrinking at 3.0% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, JSW Steel has lifted its dividend by approximately 9.8% a year on average.

The Bottom Line

Is JSW Steel an attractive dividend stock, or better left on the shelf? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. To summarise, JSW Steel looks okay on this analysis, although it doesn't appear a stand-out opportunity.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, JSW Steel has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.