Niraku GC Holdings (HKG:1245) Has Announced That It Will Be Increasing Its Dividend To ¥0.01

Niraku GC Holdings, Inc. (HKG:1245) will increase its dividend from last year's comparable payment on the 12th of January to ¥0.01. This takes the dividend yield to 4.4%, which shareholders will be pleased with.

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Niraku GC Holdings' Projected Earnings Seem Likely To Cover Future Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. Prior to this announcement, Niraku GC Holdings' dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

If the trend of the last few years continues, EPS will grow by 68.4% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 1.4% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Niraku GC Holdings

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of ¥0.76 in 2015 to the most recent total annual payment of ¥0.21. This works out to a decline of approximately 72% over that time. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. Niraku GC Holdings has seen EPS rising for the last five years, at 68% per annum. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

Niraku GC Holdings Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Niraku GC Holdings is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for Niraku GC Holdings that investors should take into consideration. Is Niraku GC Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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