Hikari Tsushin's (TSE:9435) Dividend Will Be ¥181.00

Hikari Tsushin, Inc. (TSE:9435) has announced that it will pay a dividend of ¥181.00 per share on the 8th of December. Based on this payment, the dividend yield for the company will be 1.5%, which is fairly typical for the industry.

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Hikari Tsushin's Future Dividend Projections Appear Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. However, prior to this announcement, Hikari Tsushin's dividend was comfortably covered by both cash flow and earnings. 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 8.8%. If the dividend continues on this path, the payout ratio could be 32% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Hikari Tsushin

Hikari Tsushin Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥160.00 in 2015 to the most recent total annual payment of ¥624.00. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Hikari Tsushin has grown earnings per share at 16% per year over the past five years. Hikari Tsushin definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Hikari Tsushin's Dividend

Overall, a dividend increase is always good, and we think that Hikari Tsushin is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 Hikari Tsushin (of which 1 is potentially serious!) you should know about. Is Hikari Tsushin 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.