Teikoku Electric Mfg.Co.Ltd (TSE:6333) Has Announced A Dividend Of ¥55.00

The board of Teikoku Electric Mfg.Co.,Ltd. (TSE:6333) has announced that it will pay a dividend on the 3rd of December, with investors receiving ¥55.00 per share. This will take the dividend yield to an attractive 3.4%, providing a nice boost to shareholder returns.

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Teikoku Electric Mfg.Co.Ltd's Payment Could Potentially Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. Based on the last payment, Teikoku Electric Mfg.Co.Ltd was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.

The next year is set to see EPS grow by 7.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 60% by next year, which is in a pretty sustainable range.

See our latest analysis for Teikoku Electric Mfg.Co.Ltd

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of ¥12.00 in 2015 to the most recent total annual payment of ¥110.00. This works out to be a compound annual growth rate (CAGR) of approximately 25% a year over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Teikoku Electric Mfg.Co.Ltd has grown earnings per share at 11% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Teikoku Electric Mfg.Co.Ltd Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Teikoku Electric Mfg.Co.Ltd is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Teikoku Electric Mfg.Co.Ltd that you should be aware of before investing. Is Teikoku Electric Mfg.Co.Ltd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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