Marubeni Construction Material LeaseLtd (TSE:9763) Will Pay A Dividend Of ¥65.00

Marubeni Construction Material Lease Co.,Ltd. (TSE:9763) will pay a dividend of ¥65.00 on the 9th of December. This will take the annual payment to 4.5% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for Marubeni Construction Material LeaseLtd

Marubeni Construction Material LeaseLtd's Future Dividend Projections Appear Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Based on the last payment, Marubeni Construction Material LeaseLtd was paying only paying out a fraction of earnings, but the payment was a massive 247% of cash flows. While the business may be attempting to set a balanced dividend policy, a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.

Over the next year, EPS could expand by 8.5% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 35%, which is in the range that makes us comfortable with the sustainability of the dividend.

Marubeni Construction Material LeaseLtd Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was ¥40.00, compared to the most recent full-year payment of ¥130.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. Marubeni Construction Material LeaseLtd has impressed us by growing EPS at 8.5% per year over the past five years. Marubeni Construction Material LeaseLtd definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On Marubeni Construction Material LeaseLtd's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While Marubeni Construction Material LeaseLtd is earning enough to cover the payments, the cash flows are lacking. Overall, we don't think this company has the makings of a good income 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. As an example, we've identified 2 warning signs for Marubeni Construction Material LeaseLtd that you should be aware of before investing. Is Marubeni Construction Material LeaseLtd 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.