National Fertilizers Limited's (NSE:NFL) dividend will be increasing from last year's payment of the same period to ₹1.56 on 28th of October. This makes the dividend yield 1.6%, which is above the industry average.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
Advertisement
National Fertilizers' Future Dividend Projections Appear Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, National Fertilizers was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.
Looking forward, earnings per share could rise by 26.1% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 42% by next year, which we think can be pretty sustainable going forward.
historic-dividend
NSEI:NFL Historic Dividend September 7th 2025
Check out our latest analysis for National Fertilizers
Dividend Volatility
While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2015, the dividend has gone from ₹0.17 total annually to ₹1.56. This implies that the company grew its distributions at a yearly rate of about 25% over that duration. National Fertilizers has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that National Fertilizers has grown earnings per share at 26% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that National Fertilizers could prove to be a strong dividend payer.
National Fertilizers Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 2 warning signs for National Fertilizers you should be aware of, and 1 of them is a bit concerning. Is National Fertilizers not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
Valuation is complex, but we're here to simplify it.
Discover if National Fertilizers might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free Analysis
Have feedback on this article? Concerned about the content? [**Get in touch**](https://investor-research.typeform.com/to/wvg6MFri#feedback_token=NDA0MzczNjo1ZjFjYTQ3MTc2MjJmMjUz&company=National Fertilizers&blueprintid=4043736) with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.