Stock Analysis

Sato Shoji (TSE:8065) Has Announced A Dividend Of ¥38.00

TSE:8065
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Sato Shoji Corporation (TSE:8065) has announced that it will pay a dividend of ¥38.00 per share on the 1st of December. This takes the dividend yield to 4.8%, which shareholders will be pleased with.

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Sato Shoji's Projected Earnings Seem Likely To Cover Future Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, Sato Shoji's earnings easily covered the dividend, but free cash flows were negative. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.

Looking forward, earnings per share could rise by 16.6% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 27% by next year, which we think can be pretty sustainable going forward.

historic-dividend
TSE:8065 Historic Dividend July 24th 2025

View our latest analysis for Sato Shoji

Sato Shoji 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 ¥24.00 in 2015 to the most recent total annual payment of ¥76.00. This means that it has been growing its distributions at 12% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Sato Shoji has seen EPS rising for the last five years, at 17% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Sato Shoji's prospects of growing its dividend payments in the future.

Our Thoughts On Sato Shoji's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Case in point: We've spotted 2 warning signs for Sato Shoji (of which 1 is a bit concerning!) you should know about. 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:8065

Sato Shoji

Sells iron and steel products, non-ferrous metals, machines, electronic materials, industrial tools, lifestyle goods, precious metals and jewelry, construction materials, and environment-related goods in Japan.

Established dividend payer with adequate balance sheet.

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