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Kawasaki Heavy Industries' (TSE:7012) Dividend Will Be ¥75.00

Simply Wall St · 07/24 03:49

The board of Kawasaki Heavy Industries, Ltd. (TSE:7012) has announced that it will pay a dividend on the 3rd of December, with investors receiving ¥75.00 per share. This takes the annual payment to 1.4% of the current stock price, which unfortunately is below what the industry is paying.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Kawasaki Heavy Industries' stock price has increased by 33% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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Kawasaki Heavy Industries' Projected Earnings Seem Likely To Cover Future Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. However, Kawasaki Heavy Industries' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 12.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 25%, which is in the range that makes us comfortable with the sustainability of the dividend.

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TSE:7012 Historic Dividend July 24th 2025

See our latest analysis for Kawasaki Heavy Industries

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 annual payment back then was ¥70.00, compared to the most recent full-year payment of ¥150.00. This means that it has been growing its distributions at 7.9% 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 Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Kawasaki Heavy Industries has impressed us by growing EPS at 36% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

Kawasaki Heavy Industries Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for Kawasaki Heavy Industries (1 shouldn't be ignored!) that you should be aware of before investing. Is Kawasaki Heavy Industries not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.