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Eternal Hospitality GroupLtd (TSE:3193) Is Due To Pay A Dividend Of ¥23.00

Simply Wall St · 4d ago

Eternal Hospitality Group Co.,Ltd. (TSE:3193) has announced that it will pay a dividend of ¥23.00 per share on the 7th of April. This means the annual payment is 1.3% of the current stock price, which is above the average for the industry.

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Eternal Hospitality GroupLtd's Future Dividend Projections Appear Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Eternal Hospitality GroupLtd was paying a whopping 829% as a dividend, but this only made up 26% of its overall earnings. The business might be trying to strike a balance between returning cash to shareholders and reinvesting back into the business, but this high of a payout ratio could definitely force the dividend to be cut if the company runs into a bit of a tough spot.

The next year is set to see EPS grow by 13.0%. If the dividend continues on this path, the payout ratio could be 39% by next year, which we think can be pretty sustainable going forward.

historic-dividend
TSE:3193 Historic Dividend January 6th 2026

View our latest analysis for Eternal Hospitality GroupLtd

Eternal Hospitality GroupLtd Is Still Building Its Track Record

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2023, the annual payment back then was ¥8.00, compared to the most recent full-year payment of ¥46.00. This implies that the company grew its distributions at a yearly rate of about 79% over that duration. Eternal Hospitality GroupLtd has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Eternal Hospitality GroupLtd has impressed us by growing EPS at 33% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

In Summary

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Eternal Hospitality GroupLtd is earning enough to cover the payments, the cash flows are lacking. Overall, we don't think this company has the makings of a good 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Are management backing themselves to deliver performance? Check their shareholdings in Eternal Hospitality GroupLtd in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.