Kubota (TSE:6326) Is Due To Pay A Dividend Of ¥25.00

Kubota Corporation's (TSE:6326) investors are due to receive a payment of ¥25.00 per share on 24th of March. Based on this payment, the dividend yield will be 2.3%, which is fairly typical for the industry.

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Kubota's Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. Before making this announcement, Kubota was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 9.2%. If the dividend continues along recent trends, we estimate the payout ratio will be 31%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Kubota

Kubota Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥28.00 total annually to ¥50.00. This implies that the company grew its distributions at a yearly rate of about 6.0% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

We Could See Kubota's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Kubota has been growing its earnings per share at 8.7% a year over the past five years. Kubota definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Kubota's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. As an example, we've identified 1 warning sign for Kubota that you should be aware of before investing. 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.