IntegraFin Holdings plc's (LON:IHP) investors are due to receive a payment of £0.07 per share on 26th of January. This payment means that the dividend yield will be 3.5%, which is around the industry average.

View our latest analysis for IntegraFin Holdings

IntegraFin Holdings' Earnings Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Prior to this announcement, IntegraFin Holdings' dividend was only 68% of earnings, however it was paying out 510% of free cash flows. This signals that the company is more focused on returning cash flow to shareholders, but it could mean that the dividend is exposed to cuts in the future.

Over the next year, EPS is forecast to expand by 17.3%. If the dividend continues on this path, the payout ratio could be 61% by next year, which we think can be pretty sustainable going forward. historic-dividend

IntegraFin Holdings' Dividend Has Lacked Consistency

It's comforting to see that IntegraFin Holdings has been paying a dividend for a number of years now, however it has been cut at least once in that time. This suggests that the dividend might not be the most reliable. The dividend has gone from an annual total of £0.064 in 2018 to the most recent total annual payment of £0.102. This means that it has been growing its distributions at 9.8% per annum over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Has Growth Potential

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. IntegraFin Holdings has seen EPS rising for the last five years, at 8.7% per annum. The company is paying out a lot of its cash as a dividend, but it looks okay based on the payout ratio.

Our Thoughts On IntegraFin Holdings' Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for IntegraFin Holdings that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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