WEBULL

Godrej Agrovet (NSE:GODREJAGRO) Is Paying Out A Larger Dividend Than Last Year

Simply Wall St · 07/06 02:47

Godrej Agrovet Limited (NSE:GODREJAGRO) has announced that it will be increasing its dividend from last year's comparable payment on the 11th of August to ₹11.00. This takes the dividend yield to 1.4%, which shareholders will be pleased with.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Godrej Agrovet's Payment Could Potentially Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, Godrej Agrovet's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS is forecast to expand by 82.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 31%, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend
NSEI:GODREJAGRO Historic Dividend July 6th 2025

View our latest analysis for Godrej Agrovet

Godrej Agrovet Is Still Building Its Track Record

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The dividend has gone from an annual total of ₹4.50 in 2018 to the most recent total annual payment of ₹11.00. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

We Could See Godrej Agrovet's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Godrej Agrovet has impressed us by growing EPS at 7.0% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

In Summary

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Godrej Agrovet that investors should know about before committing capital to this stock. Is Godrej Agrovet not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.