Matching Service Japan (TSE:6539) Has Announced A Dividend Of ¥56.00

Matching Service Japan Co., Ltd. (TSE:6539) will pay a dividend of ¥56.00 on the 26th of June. Based on this payment, the dividend yield on the company's stock will be 5.6%, which is an attractive boost to shareholder returns.

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Estimates Indicate Matching Service Japan's Could Struggle to Maintain Dividend Payments In The Future

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, the company wasn't making enough to cover what it was paying to shareholders. It will be difficult to sustain this level of payout so we wouldn't be confident about this continuing.

If the company can't turn things around, EPS could fall by 0.8% over the next year. If the dividend continues along the path it has been on recently, the payout ratio in 12 months could be 181%, which is definitely a bit high to be sustainable going forward.

Check out our latest analysis for Matching Service Japan

Matching Service Japan Is Still Building Its Track Record

Matching Service Japan's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 5 years was ¥15.00 in 2020, and the most recent fiscal year payment was ¥56.00. This means that it has been growing its distributions at 30% per annum over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

Matching Service Japan May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Let's not jump to conclusions as things might not be as good as they appear on the surface. Although it's important to note that Matching Service Japan's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time.

Matching Service Japan's Dividend Doesn't Look Great

Overall, while some might be pleased that the dividend wasn't cut, we think this may help Matching Service Japan make more consistent payments in the future. The company's earnings aren't high enough to be making such big distributions, and it isn't backed up by strong growth or consistency either. Considering all of these factors, we wouldn't rely on this dividend if we wanted to live on the income.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 3 warning signs for Matching Service Japan you should be aware of, and 2 of them are significant. If you are a dividend investor, you might also want to look at our curated list of high yield 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.