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Chubu Steel Plate (TSE:5461) Has Affirmed Its Dividend Of ¥51.00

Simply Wall St · 3d ago

The board of Chubu Steel Plate Co., Ltd. (TSE:5461) has announced that it will pay a dividend of ¥51.00 per share on the 26th of June. This means the annual payment is 4.7% of the current stock price, which is above the average for the industry.

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Chubu Steel Plate's Distributions May Be Difficult To Sustain

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Even in the absence of profits, Chubu Steel Plate is paying a dividend. Along with this, it is also not generating free cash flows, which raises concerns about the sustainability of the dividend.

Over the next year, EPS could expand by 7.1% if recent trends continue. While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability. Unless this can be done in short order, the dividend might be difficult to sustain.

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TSE:5461 Historic Dividend December 3rd 2025

See our latest analysis for Chubu Steel Plate

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the dividend has gone from ¥12.00 total annually to ¥101.00. This works out to be a compound annual growth rate (CAGR) of approximately 24% a year over that time. Chubu Steel Plate 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 Has Growth Potential

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Chubu Steel Plate has been growing its earnings per share at 7.1% a year over the past five years. Even though the company isn't making a profit, strong earnings growth could turn that around in the near future. Assuming the company can post positive net income numbers soon, it could has the potential to be a decent dividend payer.

The Dividend Could Prove To Be Unreliable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Chubu Steel Plate's payments, as there could be some issues with sustaining them into the future. The payments are bit high to be considered sustainable, and the track record isn't the best. We don't think Chubu Steel Plate is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Chubu Steel Plate that investors should take into consideration. Is Chubu Steel Plate not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.