TORQ's (TSE:8077) Dividend Will Be ¥3.00

The board of TORQ Inc. (TSE:8077) has announced that it will pay a dividend of ¥3.00 per share on the 16th of July. This means the dividend yield will be fairly typical at 2.2%.

See our latest analysis for TORQ

TORQ's Earnings Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. However, TORQ's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

If the trend of the last few years continues, EPS will grow by 8.4% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 16%, which is in the range that makes us comfortable with the sustainability of the dividend.

TORQ Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was ¥5.00 in 2014, and the most recent fiscal year payment was ¥6.00. This means that it has been growing its distributions at 1.8% per annum over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

We Could See TORQ's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. TORQ has impressed us by growing EPS at 8.4% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for TORQ's prospects of growing its dividend payments in the future.

TORQ Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think TORQ might even raise payments in the future. 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 of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. To that end, TORQ has 3 warning signs (and 1 which is a bit unpleasant) we think 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.