ASIRO Inc. (TSE:7378) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
It looks like ASIRO Inc. (TSE:7378) is about to go ex-dividend in the next two 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. Meaning, you will need to purchase ASIRO's shares before the 29th of October to receive the dividend, which will be paid on the 13th of January.
The company's upcoming dividend is JP¥41.00 a share, following on from the last 12 months, when the company distributed a total of JP¥65.00 per share to shareholders. Last year's total dividend payments show that ASIRO has a trailing yield of 4.3% on the current share price of JP¥1526.00. If you buy this business for its dividend, you should have an idea of whether ASIRO's dividend is reliable and sustainable. As a result, readers should always check whether ASIRO has been able to grow its dividends, or if the dividend might be cut.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. ASIRO paid out a comfortable 36% of its profit last year. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (71%) of its free cash flow in the past year, which is within an average range for most companies.
It's positive to see that ASIRO's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Check out our latest analysis for ASIRO
Click here to see how much of its profit ASIRO paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see ASIRO has grown its earnings rapidly, up 29% a year for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. ASIRO has delivered 51% dividend growth per year on average over the past four years. 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
Has ASIRO got what it takes to maintain its dividend payments? From a dividend perspective, we're encouraged to see that earnings per share have been growing, the company is paying out less than half of its earnings, and a bit over half its free cash flow. ASIRO 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 ASIRO is facing. Case in point: We've spotted 1 warning sign for ASIRO you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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