METAWATER (TSE:9551) Is Due To Pay A Dividend Of ¥35.00

METAWATER Co., Ltd. (TSE:9551) will pay a dividend of ¥35.00 on the 5th of June. Based on this payment, the dividend yield for the company will be 2.1%, which is fairly typical for the industry.

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METAWATER's Payment Could Potentially Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. However, prior to this announcement, METAWATER's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 0.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 32%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for METAWATER

METAWATER Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥29.00 in 2015 to the most recent total annual payment of ¥70.00. This means that it has been growing its distributions at 9.2% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that METAWATER has been growing its earnings per share at 15% a year over the past five years. METAWATER definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

METAWATER Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that METAWATER is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 METAWATER analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.