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DAIHEN (TSE:6622) Is Increasing Its Dividend To ¥92.00

Simply Wall St · 1d ago

DAIHEN Corporation (TSE:6622) will increase its dividend from last year's comparable payment on the 29th of June to ¥92.00. Based on this payment, the dividend yield for the company will be 2.0%, which is fairly typical for the industry.

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DAIHEN's Projected Earnings Seem Likely To Cover Future Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable. But before making this announcement, DAIHEN's earnings quite easily covered the dividend. The business is earning enough to make the dividend feasible, but the cash payout ratio of 79% shows that most of the cash is going back to the shareholders, which could constrain growth prospects going forward.

The next year is set to see EPS grow by 15.4%. Assuming the dividend continues along recent trends, we think the payout ratio could be 32% by next year, which is in a pretty sustainable range.

historic-dividend
TSE:6622 Historic Dividend December 18th 2025

View our latest analysis for DAIHEN

DAIHEN Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the dividend has gone from ¥40.00 total annually to ¥184.00. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that DAIHEN has grown earnings per share at 12% per year over the past five years. DAIHEN definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

In Summary

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. However, lack of cash flows makes us wary of the potential for cuts in the dividend's future, even though the dividend is generally looking okay. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 2 warning signs for DAIHEN that investors should know about before committing capital to this stock. Is DAIHEN not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.