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Marumae's (TSE:6264) Shareholders Will Receive A Bigger Dividend Than Last Year

Simply Wall St · 2d ago

Marumae Co., Ltd. (TSE:6264) has announced that it will be increasing its dividend from last year's comparable payment on the 17th of April to ¥28.00. This takes the dividend yield to 2.8%, which shareholders will be pleased with.

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Marumae's Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Before making this announcement, Marumae was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 15.0% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 43% by next year, which is in a pretty sustainable range.

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TSE:6264 Historic Dividend December 11th 2025

View our latest analysis for Marumae

Marumae's Dividend Has Lacked Consistency

Even in its relatively short history, the company has reduced the dividend at least once. This suggests that the dividend might not be the most reliable. The annual payment during the last 5 years was ¥22.00 in 2020, and the most recent fiscal year payment was ¥56.00. This works out to be a compound annual growth rate (CAGR) of approximately 21% a year over that time. Marumae 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 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. It's encouraging to see that Marumae has been growing its earnings per share at 15% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Marumae's prospects of growing its dividend payments in the future.

We Really Like Marumae's Dividend

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.

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. Case in point: We've spotted 4 warning signs for Marumae (of which 2 make us uncomfortable!) you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.