Ebara JitsugyoLtd (TSE:6328) Is Due To Pay A Dividend Of ¥60.00

Ebara Jitsugyo Co.,Ltd. (TSE:6328) will pay a dividend of ¥60.00 on the 30th of March. This takes the annual payment to 2.3% of the current stock price, which is about average for the industry.

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Ebara JitsugyoLtd's Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. Based on the last payment, Ebara JitsugyoLtd was earning enough to cover the dividend, but free cash flows weren't positive. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

If the trend of the last few years continues, EPS will grow by 17.2% over the next 12 months. If the dividend continues on this path, the payout ratio could be 35% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Ebara JitsugyoLtd

Ebara JitsugyoLtd Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was ¥22.50 in 2015, and the most recent fiscal year payment was ¥100.00. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Ebara JitsugyoLtd has been growing its earnings per share at 17% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Ebara JitsugyoLtd's prospects of growing its dividend payments in the future.

Our Thoughts On Ebara JitsugyoLtd's Dividend

In summary, while it's always good to see the dividend being raised, we don't think Ebara JitsugyoLtd's payments are rock solid. While Ebara JitsugyoLtd is earning enough to cover the payments, the cash flows are lacking. We would be a touch cautious of relying on this stock primarily for the dividend income.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Ebara JitsugyoLtd that investors should know about before committing capital to this stock. Is Ebara JitsugyoLtd 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.