Tsubakimoto Chain (TSE:6371) Is Due To Pay A Dividend Of ¥99.00

Tsubakimoto Chain Co. (TSE:6371) has announced that it will pay a dividend of ¥99.00 per share on the 4th of December. This will take the annual payment to 3.9% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for Tsubakimoto Chain

Tsubakimoto Chain's Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, Tsubakimoto Chain 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 4.5%. If the dividend continues on this path, the payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.

Tsubakimoto Chain 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 ¥40.00 total annually to ¥240.00. This means that it has been growing its distributions at 20% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

We Could See Tsubakimoto Chain's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Tsubakimoto Chain has grown earnings per share at 7.6% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like Tsubakimoto Chain's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Tsubakimoto Chain stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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