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We Wouldn't Be Too Quick To Buy Coca-Cola Bottlers Japan Holdings Inc. (TSE:2579) Before It Goes Ex-Dividend

Simply Wall St · 1d ago

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Coca-Cola Bottlers Japan Holdings Inc. (TSE:2579) is about to trade ex-dividend in the next 4 days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Coca-Cola Bottlers Japan Holdings' shares on or after the 29th of December will not receive the dividend, which will be paid on the 30th of March.

The company's next dividend payment will be JP¥32.00 per share, on the back of last year when the company paid a total of JP¥64.00 to shareholders. Looking at the last 12 months of distributions, Coca-Cola Bottlers Japan Holdings has a trailing yield of approximately 2.0% on its current stock price of JP¥3200.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Coca-Cola Bottlers Japan Holdings lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. Fortunately, it paid out only 43% of its free cash flow in the past year.

See our latest analysis for Coca-Cola Bottlers Japan Holdings

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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TSE:2579 Historic Dividend December 24th 2025

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Coca-Cola Bottlers Japan Holdings reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Coca-Cola Bottlers Japan Holdings has delivered 4.6% dividend growth per year on average over the past 10 years.

We update our analysis on Coca-Cola Bottlers Japan Holdings every 24 hours, so you can always get the latest insights on its financial health, here.

To Sum It Up

Should investors buy Coca-Cola Bottlers Japan Holdings for the upcoming dividend? It's hard to get used to Coca-Cola Bottlers Japan Holdings paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. Overall it doesn't look like the most suitable dividend stock for a long-term buy and hold investor.

With that being said, if you're still considering Coca-Cola Bottlers Japan Holdings as an investment, you'll find it beneficial to know what risks this stock is facing. To help with this, we've discovered 1 warning sign for Coca-Cola Bottlers Japan Holdings that you should be aware of before investing in their shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.