Marubeni Construction Material LeaseLtd's (TSE:9763) Dividend Will Be ¥71.00

The board of Marubeni Construction Material Lease Co.,Ltd. (TSE:9763) has announced that it will pay a dividend on the 5th of December, with investors receiving ¥71.00 per share. This makes the dividend yield 4.7%, which is above the industry average.

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Marubeni Construction Material LeaseLtd's Payment Could Potentially Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. Based on the last payment, Marubeni Construction Material LeaseLtd was earning enough to cover the dividend, but free cash flows weren't positive. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

If the trend of the last few years continues, EPS will grow by 10.4% over the next 12 months. If the dividend continues on this path, the payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Marubeni Construction Material LeaseLtd

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. The dividend has gone from an annual total of ¥60.00 in 2015 to the most recent total annual payment of ¥143.00. This means that it has been growing its distributions at 9.1% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Marubeni Construction Material LeaseLtd has been growing its earnings per share at 10% a 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Marubeni Construction Material LeaseLtd that investors should know about before committing capital to this stock. 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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