Rural Electrificatio paid a total dividend of 16,867 million INR last year, for a market capitalization of 280,746 millions.
Dividend per share of Rural Electrificatio is 8.54 INR, and his stock market price 142.15 INR.
According to the chart, where dividend yield is displayed, Rural Electrificatio has a dividend yield of 6.01%, which is higher than the amount offered by both the market average and companies from India. It is also bigger than average of Utilities industry. This high dividend yield might be a sign to worry about the future of the company so deeper analysis is needed.
About the ability of Rural Electrificatio to maintain his current dividend of INR 8.54 per share, an amount that accounts for 6.01%, we should study its payout ratio both on earnings and on cash-flows (see chart below). Rural Electrificatio payout on ernings is currently 29.44%, which is lower than the market average and companies of Utilities industry, which are 40.24% and 49.39% respectively. Both figures lead us to believe that there is confidence that Rural Electrificatiocan maintain his current dividend.
The payout on earnings should be complemented with the payout on cash flow since it is this latter amount the one which can be distributed to shareholders. Cash flow per share of Rural Electrificatio is INR -67.69 per share, which is lower than the dividend per share paid by the company of INR 8.54, so the company does not generate enough cash to maintain his dividend in the future.
The following figure shows payout ratios over earnings and cashflow of Rural Electrificatio, compared againt world market average, India companies, Utilities industry and Electricity sector companies. You might also need to check full financial report of Rural Electrificatio.
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