Morita Holdings (TSE:6455) Will Pay A Dividend Of ¥29.00

The board of Morita Holdings Corporation (TSE:6455) has announced that it will pay a dividend on the 2nd of December, with investors receiving ¥29.00 per share. The payment will take the dividend yield to 2.4%, which is in line with the average for the industry.

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Morita Holdings' Projected Earnings Seem Likely To Cover Future Distributions

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. However, Morita Holdings' earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 7.5% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 29% by next year, which is in a pretty sustainable range.

View our latest analysis for Morita Holdings

Morita Holdings 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 2015, the dividend has gone from ¥18.00 total annually to ¥58.00. This means that it has been growing its distributions at 12% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

We Could See Morita Holdings' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Morita Holdings has grown earnings per share at 7.5% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Morita Holdings' prospects of growing its dividend payments in the future.

We Really Like Morita Holdings' Dividend

Overall, a dividend increase is always good, and we think that Morita Holdings 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. See if management have their own wealth at stake, by checking insider shareholdings in Morita Holdings stock. Is Morita Holdings 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.