Should Income Investors Consider Bisalloy Steel Group Limited (ASX:BIS) Before Its Ex-Dividend Date?

March 11, 2025 07:34 PM AEDT | By Team Kalkine Media

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Should Income Investors Consider Bisalloy Steel Group Limited (ASX:BIS) Before Its Ex-Dividend Date? — Image source: Shutterstock

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Highlights

Bisalloy Steel Group's shares to go ex-dividend soon.

Current dividend yield stands at approximately 9.7%.

Company has robust earnings growth with sustainable dividends.

Investors interested in dividends might find it timely that Bisalloy Steel Group Limited (ASX:BIS) is approaching its ex-dividend date in just two days. This date is crucial as transactions must settle before the record date to qualify for the upcoming dividend. Shareholders purchasing after March 13th, however, will not be eligible for this round of payments, slated for distribution on March 28th.

The forthcoming dividend payment will be AU$0.08 per share. Over the past year, Bisalloy Steel Group has distributed a total of AU$0.33 per share, amounting to a trailing yield of about 9.7% based on its current share price of AU$3.34. Such consistent dividend contributions are essential for long-term investment returns, provided the payouts remain sustainable.

Examining the sustainability of Bisalloy Steel Group's dividends, it's noted that the company used 81% of its earnings for dividends last year. While this level allows limited reinvestment back into the business, it is reasonably supported by 40% of the free cash flow, presenting a comfortable payout ratio.

Given the dividend coverage by both profit and cash flow, Bisalloy Steel Group showcases a promising margin of stability. This balance suggests a strong foundation for continuous dividend payments, aligning with the company's rapid earnings growth, which has seen an impressive 33% annual increase over the last five years.

Moreover, over the past decade, the dividend growth averaged about 23% annually, aligning well with increased earnings per share. Analyzing these trends may provide insights into the company’s potential for future dividend growth.

Overall, Bisalloy Steel Group presents a compelling scenario with its current dividend yield supported by solid earnings growth. However, prospective investors should consider evaluating any risks that could affect the company's dividend sustainability, keeping in mind the company's solid financial metrics and growth trajectory.

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