Blue Jet Healthcare's (NSE:BLUEJET) Shareholders Will Receive A Bigger Dividend Than Last Year
Blue Jet Healthcare Limited (NSE:BLUEJET) has announced that it will be increasing its dividend from last year's comparable payment on the 26th of October to ₹1.20. This takes the annual payment to 0.2% of the current stock price, which unfortunately is below what the industry is paying.
Blue Jet Healthcare's 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. Prior to this announcement, Blue Jet Healthcare's earnings easily covered the dividend, but free cash flows were negative. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.
Looking forward, earnings per share is forecast to rise by 36.0% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 4.3% by next year, which is in a pretty sustainable range.
View our latest analysis for Blue Jet Healthcare
Blue Jet Healthcare Doesn't Have A Long Payment History
The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Blue Jet Healthcare has been growing its earnings per share at 20% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
In Summary
In summary, while it's always good to see the dividend being raised, we don't think Blue Jet Healthcare's payments are rock solid. While Blue Jet Healthcare is earning enough to cover the payments, the cash flows are lacking. We don't think Blue Jet Healthcare is a great stock to add to your portfolio if income is your focus.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 8 Blue Jet Healthcare analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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