Yokogawa Bridge Holdings' (TSE:5911) Dividend Will Be ¥55.00

The board of Yokogawa Bridge Holdings Corp. (TSE:5911) has announced that it will pay a dividend on the 27th of June, with investors receiving ¥55.00 per share. This makes the dividend yield 4.0%, which is above the industry average.

View our latest analysis for Yokogawa Bridge Holdings

Yokogawa Bridge Holdings' Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Prior to this announcement, Yokogawa Bridge Holdings' earnings easily covered the dividend, but free cash flows were negative. 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.

Looking forward, earnings per share is forecast to rise by 17.5% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 48% by next year, which is in a pretty sustainable range.

Yokogawa Bridge Holdings Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the dividend has gone from ¥12.00 total annually to ¥110.00. This implies that the company grew its distributions at a yearly rate of about 25% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

We Could See Yokogawa Bridge Holdings' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Yokogawa Bridge Holdings has been growing its earnings per share at 5.5% a year over the past five years. The company is paying out a lot of its cash as a dividend, but it looks okay based on the payout ratio.

Our Thoughts On Yokogawa Bridge Holdings' Dividend

Overall, we always like to see the dividend being raised, but we don't think Yokogawa Bridge Holdings 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. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Yokogawa Bridge Holdings that investors should know about before committing capital to this stock. Is Yokogawa Bridge Holdings not quite the opportunity you were looking for? Why not check out our selection of top 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.