Why You Might Be Interested In Ishihara Sangyo Kaisha,Ltd. (TSE:4028) For Its Upcoming Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Ishihara Sangyo Kaisha,Ltd. (TSE:4028) is about to go ex-dividend in just four days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase Ishihara Sangyo KaishaLtd's shares before the 29th of September to receive the dividend, which will be paid on the 8th of December.
The company's upcoming dividend is JP¥50.00 a share, following on from the last 12 months, when the company distributed a total of JP¥130 per share to shareholders. Looking at the last 12 months of distributions, Ishihara Sangyo KaishaLtd has a trailing yield of approximately 4.5% on its current stock price of JP¥2915.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Ishihara Sangyo KaishaLtd can afford its dividend, and if the dividend could grow.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Ishihara Sangyo KaishaLtd paid out a comfortable 36% of its profit last year. A useful secondary check can be to evaluate whether Ishihara Sangyo KaishaLtd generated enough free cash flow to afford its dividend. Over the last year, it paid out more than three-quarters (80%) of its free cash flow generated, which is fairly high and may be starting to limit reinvestment in the business.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
View our latest analysis for Ishihara Sangyo KaishaLtd
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Ishihara Sangyo KaishaLtd's earnings have been skyrocketing, up 32% per annum for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past seven years, Ishihara Sangyo KaishaLtd has increased its dividend at approximately 41% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
To Sum It Up
Is Ishihara Sangyo KaishaLtd an attractive dividend stock, or better left on the shelf? Earnings per share have grown at a nice rate in recent times and over the last year, Ishihara Sangyo KaishaLtd paid out less than half its earnings and a bit over half its free cash flow. There's a lot to like about Ishihara Sangyo KaishaLtd, and we would prioritise taking a closer look at it.
So while Ishihara Sangyo KaishaLtd looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 1 warning sign for Ishihara Sangyo KaishaLtd that we recommend you consider before investing in the business.
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.
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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.