J. Front Retailing's (TSE:3086) Dividend Will Be ¥27.00

Simply Wall St · 07/03 22:38

J. Front Retailing Co., Ltd. (TSE:3086) has announced that it will pay a dividend of ¥27.00 per share on the 12th of November. This will take the annual payment to 2.8% of the stock price, which is above what most companies in the industry pay.

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J. Front Retailing's Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, prior to this announcement, J. Front Retailing's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to fall by 0.3% over the next year. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 37%, which is comfortable for the company to continue in the future.

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TSE:3086 Historic Dividend July 3rd 2025

Check out our latest analysis for J. Front Retailing

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was ¥24.00 in 2015, and the most recent fiscal year payment was ¥54.00. This means that it has been growing its distributions at 8.4% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. J. Front Retailing might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that J. Front Retailing has been growing its earnings per share at 63% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like J. Front Retailing's Dividend

Overall, a dividend increase is always good, and we think that J. Front Retailing is a strong income stock thanks to its track record and growing earnings. The earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. For example, we've identified 2 warning signs for J. Front Retailing (1 is significant!) that you should be aware of before investing. Is J. Front Retailing not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.