Kajima's (TSE:1812) Dividend Will Be ¥56.00

The board of Kajima Corporation (TSE:1812) has announced that it will pay a dividend of ¥56.00 per share on the 3rd of December. Based on this payment, the dividend yield for the company will be 2.7%, which is fairly typical for the industry.

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Kajima's Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. Based on the last payment, Kajima was earning enough to cover the dividend, but free cash flows weren't positive. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.

The next year is set to see EPS grow by 6.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 43% by next year, which is in a pretty sustainable range.

View our latest analysis for Kajima

Kajima Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from ¥10.00 total annually to ¥112.00. This means that it has been growing its distributions at 27% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

We Could See Kajima's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Kajima has impressed us by growing EPS at 6.0% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Our Thoughts On Kajima's Dividend

Overall, we always like to see the dividend being raised, but we don't think Kajima will make a great income stock. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. We don't think Kajima is a great stock to add to your portfolio if income is your focus.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Kajima that investors should take into consideration. 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.