Sanyo Trading (TSE:3176) Will Pay A Dividend Of ¥29.00

Sanyo Trading Co., Ltd.'s (TSE:3176) investors are due to receive a payment of ¥29.00 per share on 1st of December. The yield is still above the industry average at 3.5%.

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Sanyo Trading's Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, Sanyo Trading's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 8.6% if recent trends continue. If the dividend continues on this path, the payout ratio could be 32% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Sanyo Trading

Sanyo Trading Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was ¥18.50, compared to the most recent full-year payment of ¥57.00. This means that it has been growing its distributions at 12% per annum over that time. 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.

Sanyo Trading Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Sanyo Trading has grown earnings per share at 8.6% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Sanyo Trading's prospects of growing its dividend payments in the future.

We Really Like Sanyo Trading's Dividend

It is generally not great to see the dividend being cut, but we don't think this should happen much if at all in the future given that Sanyo Trading has the makings of a solid income stock moving forward. By reducing the dividend, pressure will be taken off the balance sheet, which could help the dividend to be consistent in the future. All of these factors considered, we think this has solid potential as a dividend stock.

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. Now, if you want to look closer, it would be worth checking out our free research on Sanyo Trading management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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