Mitsubishi Electric (TSE:6503) Has Announced A Dividend Of ¥30.00

Mitsubishi Electric Corporation's (TSE:6503) investors are due to receive a payment of ¥30.00 per share on 4th of June. This means the dividend yield will be fairly typical at 2.0%.

View our latest analysis for Mitsubishi Electric

Mitsubishi Electric's Projected Earnings Seem Likely To Cover Future Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable. Before making this announcement, Mitsubishi Electric was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 10.5%. If the dividend continues on this path, the payout ratio could be 36% by next year, which we think can be pretty sustainable going forward.

Mitsubishi Electric Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of ¥22.00 in 2015 to the most recent total annual payment of ¥50.00. This means that it has been growing its distributions at 8.6% per annum over that time. 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.

We Could See Mitsubishi Electric's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Mitsubishi Electric has impressed us by growing EPS at 6.3% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Mitsubishi Electric's prospects of growing its dividend payments in the future.

Mitsubishi Electric Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 18 Mitsubishi Electric analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Mitsubishi Electric 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.