The board of Nagase & Co., Ltd. (TSE:8012) has announced that it will pay a dividend of ¥40.00 per share on the 4th of December. Based on this payment, the dividend yield will be 2.7%, which is fairly typical for the industry.
View our latest analysis for Nagase
Nagase's Dividend Is Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, Nagase's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
The next year is set to see EPS grow by 14.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 34%, which is in the range that makes us comfortable with the sustainability of the dividend.
Nagase 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. The annual payment during the last 10 years was ¥28.00 in 2014, and the most recent fiscal year payment was ¥85.00. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
Nagase Could Grow Its Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Nagase has seen EPS rising for the last five years, at 8.5% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
Nagase Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Nagase might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Nagase management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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About TSE:8012
Nagase
Manufactures, imports/exports, and sells chemicals, plastics, electronics materials, cosmetics, and health foods worldwide.
Solid track record with excellent balance sheet and pays a dividend.