The board of Yahagi Construction Co.,Ltd. (TSE:1870) has announced that it will be paying its dividend of ¥40.00 on the 29th of November, an increased payment from last year's comparable dividend. This will take the dividend yield to an attractive 5.0%, providing a nice boost to shareholder returns.
Check out our latest analysis for Yahagi ConstructionLtd
Yahagi ConstructionLtd's Future Dividend Projections Appear Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Yahagi ConstructionLtd's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
If the trend of the last few years continues, EPS will grow by 12.5% over the next 12 months. 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.
Yahagi ConstructionLtd Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥14.00, compared to the most recent full-year payment of ¥80.00. This means that it has been growing its distributions at 19% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Yahagi ConstructionLtd has been growing its earnings per share at 13% a year over the past five years. Yahagi ConstructionLtd definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Yahagi ConstructionLtd Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Yahagi ConstructionLtd 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Yahagi ConstructionLtd stock. 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.
About TSE:1870
Yahagi ConstructionLtd
Engages in the construction of buildings in Japan.
Flawless balance sheet with solid track record and pays a dividend.
