F.C.C's (TSE:7296) Dividend Will Be ¥101.00

The board of F.C.C. Co., Ltd. (TSE:7296) has announced that it will pay a dividend of ¥101.00 per share on the 19th of June. Based on this payment, the dividend yield for the company will be 2.5%, which is fairly typical for the industry.

See our latest analysis for F.C.C

F.C.C's Future Dividend Projections Appear Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. However, prior to this announcement, F.C.C's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 0.7% over the next year. If the dividend continues on this path, the payout ratio could be 74% by next year, which we think can be pretty sustainable going forward.

F.C.C Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from ¥40.00 total annually to ¥76.00. This implies that the company grew its distributions at a yearly rate of about 6.6% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

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

The company's investors will be pleased to have been receiving dividend income for some time. F.C.C has seen EPS rising for the last five years, at 7.0% per annum. F.C.C definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like F.C.C's Dividend

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. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 2 warning signs for F.C.C you should be aware of, and 1 of them doesn't sit too well with us. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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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.