Kajima (TSE:1812) Is Due To Pay A Dividend Of ¥45.00

The board of Kajima Corporation (TSE:1812) has announced that it will pay a dividend of ¥45.00 per share on the 4th of December. This takes the dividend yield to 3.7%, which shareholders will be pleased with.

View our latest analysis for Kajima

Kajima's Payment Has Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, prior to this announcement, Kajima's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 6.7%. If the dividend continues on this path, the payout ratio could be 45% by next year, which we think can be pretty sustainable going forward.

Kajima Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥10.00 in 2014 to the most recent total annual payment of ¥90.00. This implies that the company grew its distributions at a yearly rate of about 25% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Kajima May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings have grown at around 4.2% a year for the past five years, which isn't massive but still better than seeing them shrink. If Kajima is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

We Really Like Kajima's Dividend

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. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for Kajima for free with public analyst estimates for the company. Is Kajima not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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