MEISEI INDUSTRIAL Co.,Ltd.'s (TSE:1976) investors are due to receive a payment of ¥22.00 per share on 24th of June. This means that the annual payment will be 3.0% of the current stock price, which is in line with the average for the industry.
See our latest analysis for MEISEI INDUSTRIALLtd
MEISEI INDUSTRIALLtd's Earnings Easily Cover The Distributions
Solid dividend yields are great, but they only really help us if the payment is sustainable. However, MEISEI INDUSTRIALLtd's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
If the trend of the last few years continues, EPS will grow by 2.9% over the next 12 months. If the dividend continues on this path, the payout ratio could be 36% by next year, which we think can be pretty sustainable going forward.
MEISEI INDUSTRIALLtd Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was ¥6.00, compared to the most recent full-year payment of ¥38.00. This implies that the company grew its distributions at a yearly rate of about 20% 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.
The Dividend's Growth Prospects Are Limited
Investors could be attracted to the stock based on the quality of its payment history. Earnings have grown at around 2.9% a year for the past five years, which isn't massive but still better than seeing them shrink. While EPS growth is quite low, MEISEI INDUSTRIALLtd has the option to increase the payout ratio to return more cash to shareholders.
MEISEI INDUSTRIALLtd Looks Like A Great Dividend Stock
In general, we don't like to see the dividend being cut, especially when the company has such high potential like MEISEI INDUSTRIALLtd does. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for MEISEI INDUSTRIALLtd that investors need to be conscious of moving forward. 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:1976
MEISEI INDUSTRIALLtd
Operates as a construction works company in Japan and internationally.
Flawless balance sheet with proven track record and pays a dividend.
