F.C.C (TSE:7296) Is Due To Pay A Dividend Of ¥101.00

F.C.C. Co., Ltd.'s (TSE:7296) investors are due to receive a payment of ¥101.00 per share on 19th of June. This takes the annual payment to 2.5% of the current stock price, which is about average for the industry.

Check out our latest analysis for F.C.C

F.C.C's Payment Could Potentially Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. However, F.C.C's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 1.1%. If the dividend continues on this path, the payout ratio could be 73% by next year, which we think can be pretty sustainable going forward.

F.C.C Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥40.00, compared to the most recent full-year payment of ¥76.00. This implies that the company grew its distributions at a yearly rate of about 6.6% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

We Could See F.C.C's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that F.C.C has grown earnings per share at 7.2% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for F.C.C's prospects of growing its dividend payments in the future.

F.C.C Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that F.C.C is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for F.C.C that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of 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.