Founder's Consultants Holdings (TSE:6542) Has Affirmed Its Dividend Of ¥30.00

The board of Founder's Consultants Holdings Inc. (TSE:6542) has announced that it will pay a dividend of ¥30.00 per share on the 29th of September. Based on this payment, the dividend yield on the company's stock will be 3.0%, which is an attractive boost to shareholder returns.

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Founder's Consultants Holdings' Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, Founder's Consultants Holdings' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 9.4% over the next 12 months. If the dividend continues on this path, the payout ratio could be 25% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Founder's Consultants Holdings

Founder's Consultants Holdings' Dividend Has Lacked Consistency

Founder's Consultants Holdings has been paying dividends for a while, but the track record isn't stellar. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. Since 2017, the dividend has gone from ¥9.31 total annually to ¥30.00. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. Founder's Consultants Holdings has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

We Could See Founder's Consultants Holdings' Dividend Growing

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Founder's Consultants Holdings has impressed us by growing EPS at 9.4% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Founder's Consultants Holdings' prospects of growing its dividend payments in the future.

Founder's Consultants Holdings Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Founder's Consultants Holdings might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. As an example, we've identified 2 warning signs for Founder's Consultants Holdings that you should be aware of before investing. 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.