Nihon Tokushu Toryo (TSE:4619) Will Pay A Larger Dividend Than Last Year At ¥26.00

Nihon Tokushu Toryo Co., Ltd. (TSE:4619) will increase its dividend on the 24th of June to ¥26.00, which is 4.0% higher than last year's payment from the same period of ¥25.00. This will take the dividend yield to an attractive 3.8%, providing a nice boost to shareholder returns.

View our latest analysis for Nihon Tokushu Toryo

Nihon Tokushu Toryo's Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Before making this announcement, Nihon Tokushu Toryo was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 8.8% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 25%, which is in the range that makes us comfortable with the sustainability of the dividend.

Nihon Tokushu Toryo Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was ¥10.00, compared to the most recent full-year payment of ¥47.00. This means that it has been growing its distributions at 17% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

We Could See Nihon Tokushu Toryo's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Nihon Tokushu Toryo has been growing its earnings per share at 8.8% a year over the past five years. Nihon Tokushu Toryo definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Nihon Tokushu Toryo Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Now, if you want to look closer, it would be worth checking out our free research on Nihon Tokushu Toryo management tenure, salary, and performance. Is Nihon Tokushu Toryo not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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.