Kurita Water Industries (TSE:6370) Has Announced That It Will Be Increasing Its Dividend To ¥46.00

The board of Kurita Water Industries Ltd. (TSE:6370) has announced that it will be paying its dividend of ¥46.00 on the 29th of November, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 1.5%.

View our latest analysis for Kurita Water Industries

Kurita Water Industries' Earnings Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, Kurita Water Industries was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 9.5% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 33%, which is in the range that makes us comfortable with the sustainability of the dividend.

Kurita Water Industries Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was ¥44.00 in 2014, and the most recent fiscal year payment was ¥92.00. This implies that the company grew its distributions at a yearly rate of about 7.7% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

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 Kurita Water Industries has been growing its earnings per share at 11% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Kurita Water Industries' prospects of growing its dividend payments in the future.

Kurita Water Industries Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Kurita Water Industries 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 Kurita Water Industries analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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