TOMONY Holdings (TSE:8600) Is Increasing Its Dividend To ¥13.00

TOMONY Holdings, Inc. (TSE:8600) will increase its dividend from last year's comparable payment on the 8th of December to ¥13.00. This will take the annual payment to 4.2% of the stock price, which is above what most companies in the industry pay.

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TOMONY Holdings' Earnings Will Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Having distributed dividends for at least 10 years, TOMONY Holdings has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, TOMONY Holdings' payout ratio sits at 6.0%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, earnings per share could rise by 10.2% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 25% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for TOMONY Holdings

TOMONY Holdings Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the dividend has gone from ¥8.00 total annually to ¥26.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. TOMONY Holdings has seen EPS rising for the last five years, at 10% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

TOMONY Holdings Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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 of these factors considered, we think this has solid potential as a dividend 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. Now, if you want to look closer, it would be worth checking out our free research on TOMONY Holdings management tenure, salary, and performance. 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.