Maezawa Kyuso IndustriesLtd's (TSE:6485) Dividend Will Be ¥30.00
The board of Maezawa Kyuso Industries Co.,Ltd. (TSE:6485) has announced that it will pay a dividend on the 5th of December, with investors receiving ¥30.00 per share. This will take the dividend yield to an attractive 3.4%, providing a nice boost to shareholder returns.
Maezawa Kyuso IndustriesLtd's Payment Could Potentially Have Solid Earnings Coverage
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Prior to this announcement, Maezawa Kyuso IndustriesLtd was quite comfortably covering its dividend with earnings and it was paying more than 75% of its free cash flow to shareholders. The business is earning enough to make the dividend feasible, but the cash payout ratio of 76% indicates it is more focused on returning cash to shareholders than growing the business.
Looking forward, earnings per share could rise by 7.8% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 59% by next year, which is in a pretty sustainable range.
Check out our latest analysis for Maezawa Kyuso IndustriesLtd
Maezawa Kyuso IndustriesLtd Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was ¥17.50 in 2015, and the most recent fiscal year payment was ¥50.00. This means that it has been growing its distributions at 11% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
We Could See Maezawa Kyuso IndustriesLtd's Dividend Growing
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Maezawa Kyuso IndustriesLtd has impressed us by growing EPS at 7.8% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.
Our Thoughts On Maezawa Kyuso IndustriesLtd's Dividend
Overall, we always like to see the dividend being raised, but we don't think Maezawa Kyuso IndustriesLtd will make a great income stock. While Maezawa Kyuso IndustriesLtd is earning enough to cover the dividend, we are generally unimpressed with its future prospects. This company is not in the top tier of income providing stocks.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Are management backing themselves to deliver performance? Check their shareholdings in Maezawa Kyuso IndustriesLtd in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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