BELLSYSTEM24 Holdings (TSE:6183) Has Affirmed Its Dividend Of ¥30.00

The board of BELLSYSTEM24 Holdings, Inc. (TSE:6183) has announced that it will pay a dividend on the 1st of June, with investors receiving ¥30.00 per share. This makes the dividend yield 4.3%, which will augment investor returns quite nicely.

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BELLSYSTEM24 Holdings' Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, BELLSYSTEM24 Holdings' dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS is forecast to expand by 5.8%. If the dividend continues along recent trends, we estimate the payout ratio will be 52%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for BELLSYSTEM24 Holdings

BELLSYSTEM24 Holdings Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was ¥18.00 in 2015, and the most recent fiscal year payment was ¥60.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

BELLSYSTEM24 Holdings May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings has been rising at 2.9% per annum over the last five years, which admittedly is a bit slow. Growth of 2.9% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This could mean the dividend doesn't have the growth potential we look for going into the future.

We Really Like BELLSYSTEM24 Holdings' Dividend

Overall, we like to see the dividend staying consistent, and we think BELLSYSTEM24 Holdings might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for BELLSYSTEM24 Holdings that investors should know about before committing capital to this stock. Is BELLSYSTEM24 Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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