There's A Lot To Like About Plus Alpha ConsultingLtd's (TSE:4071) Upcoming JP¥50.00 Dividend
Plus Alpha Consulting Co.,Ltd. (TSE:4071) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase Plus Alpha ConsultingLtd's shares on or after the 29th of September will not receive the dividend, which will be paid on the 29th of December.
The company's next dividend payment will be JP¥50.00 per share, and in the last 12 months, the company paid a total of JP¥50.00 per share. Based on the last year's worth of payments, Plus Alpha ConsultingLtd stock has a trailing yield of around 2.4% on the current share price of JP¥2113.00. If you buy this business for its dividend, you should have an idea of whether Plus Alpha ConsultingLtd's dividend is reliable and sustainable. As a result, readers should always check whether Plus Alpha ConsultingLtd has been able to grow its dividends, or if the dividend might be cut.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Plus Alpha ConsultingLtd paying out a modest 31% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. The good news is it paid out just 12% of its free cash flow in the last year.
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 Plus Alpha ConsultingLtd
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Plus Alpha ConsultingLtd has grown its earnings rapidly, up 30% a year for the past five years. Plus Alpha ConsultingLtd is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past five years, Plus Alpha ConsultingLtd has increased its dividend at approximately 53% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
Final Takeaway
Is Plus Alpha ConsultingLtd an attractive dividend stock, or better left on the shelf? Plus Alpha ConsultingLtd has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. Plus Alpha ConsultingLtd looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
On that note, you'll want to research what risks Plus Alpha ConsultingLtd is facing. Our analysis shows 1 warning sign for Plus Alpha ConsultingLtd and you should be aware of this before buying any 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.