EnBio Holdings (TSE:6092) Is Paying Out A Dividend Of ¥9.00

The board of EnBio Holdings, Inc (TSE:6092) has announced that it will pay a dividend on the 11th of June, with investors receiving ¥9.00 per share. This means the dividend yield will be fairly typical at 1.5%.

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EnBio Holdings' Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. Prior to this announcement, EnBio Holdings' earnings easily covered the dividend, but free cash flows were negative. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

If the trend of the last few years continues, EPS will grow by 9.8% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 12%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for EnBio Holdings

EnBio Holdings Doesn't Have A Long Payment History

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2022, the annual payment back then was ¥8.00, compared to the most recent full-year payment of ¥9.00. This implies that the company grew its distributions at a yearly rate of about 3.0% over that duration. EnBio Holdings hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

We Could See EnBio Holdings' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. EnBio Holdings has impressed us by growing EPS at 9.8% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for EnBio Holdings' prospects of growing its dividend payments in the future.

In Summary

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about EnBio Holdings' payments, as there could be some issues with sustaining them into the future. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We don't think EnBio Holdings is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. To that end, EnBio Holdings has 4 warning signs (and 1 which is potentially serious) we think 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.

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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.