Fuso Pharmaceutical IndustriesLtd (TSE:4538) Has Announced That It Will Be Increasing Its Dividend To ¥45.00
The board of Fuso Pharmaceutical Industries,Ltd. (TSE:4538) has announced that it will be paying its dividend of ¥45.00 on the 3rd of December, an increased payment from last year's comparable dividend. This will take the annual payment to 4.1% of the stock price, which is above what most companies in the industry pay.
Fuso Pharmaceutical IndustriesLtd's Projected Earnings Seem Likely To Cover Future Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, prior to this announcement, Fuso Pharmaceutical IndustriesLtd's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share could rise by 13.8% 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 25% by next year, which we think can be pretty sustainable going forward.
See our latest analysis for Fuso Pharmaceutical IndustriesLtd
Fuso Pharmaceutical IndustriesLtd Is Still Building Its Track Record
The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Fuso Pharmaceutical IndustriesLtd has been growing its earnings per share at 14% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
We Really Like Fuso Pharmaceutical IndustriesLtd's Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 2 warning signs for Fuso Pharmaceutical IndustriesLtd that investors need to be conscious of moving forward. Is Fuso Pharmaceutical IndustriesLtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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