The board of Sinko Industries Ltd. (TSE:6458) has announced that it will pay a dividend on the 4th of December, with investors receiving ¥45.00 per share. This makes the dividend yield 2.9%, which is above the industry average.
Check out our latest analysis for Sinko Industries
Sinko Industries' Future Dividend Projections Appear Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Sinko Industries was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.
Looking forward, earnings per share is forecast to rise by 9.7% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 39% by next year, which is in a pretty sustainable range.
Sinko Industries Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from ¥20.00 total annually to ¥135.00. This implies that the company grew its distributions at a yearly rate of about 21% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
We Could See Sinko Industries' Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Sinko Industries has grown earnings per share at 9.7% per year over the past five years. Sinko Industries definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Sinko Industries' Dividend
Overall, a dividend increase is always good, and we think that Sinko Industries is a strong income stock thanks to its track record and growing earnings. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.
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 Sinko Industries stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
About TSE:6458
Sinko Industries
Manufactures, sells, and installs air conditioning equipment in Japan and internationally.
Flawless balance sheet with solid track record and pays a dividend.
