Kpp Group Holdings (TSE:9274) Has Announced A Dividend Of ¥11.00

Kpp Group Holdings Co., Ltd. (TSE:9274) will pay a dividend of ¥11.00 on the 1st of July. This means that the annual payment will be 3.0% of the current stock price, which is in line with the average for the industry.

View our latest analysis for Kpp Group Holdings

Kpp Group Holdings' Earnings Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Before making this announcement, Kpp Group Holdings was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 21.2% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 17%, which is in the range that makes us comfortable with the sustainability of the dividend.

Kpp Group Holdings' Dividend Has Lacked Consistency

Looking back, Kpp Group Holdings' dividend hasn't been particularly consistent. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. The annual payment during the last 5 years was ¥10.00 in 2019, and the most recent fiscal year payment was ¥22.00. This works out to be a compound annual growth rate (CAGR) of approximately 17% a year over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. We are encouraged to see that Kpp Group Holdings has grown earnings per share at 21% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Kpp Group Holdings Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Kpp Group Holdings 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, Kpp Group Holdings has 3 warning signs (and 1 which is significant) we think you should know about. Is Kpp Group Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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