Founder's Consultants Holdings (TSE:6542) Is Paying Out A Dividend Of ¥30.00

The board of Founder's Consultants Holdings Inc. (TSE:6542) has announced that it will pay a dividend on the 29th of September, with investors receiving ¥30.00 per share. This means the annual payment is 3.1% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Founder's Consultants Holdings

Founder's Consultants Holdings' 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. However, Founder's Consultants Holdings' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share could rise by 9.7% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 25% by next year, which is in a pretty sustainable range.

Founder's Consultants Holdings' Dividend Has Lacked Consistency

Even in its relatively short history, the company has reduced the dividend at least once. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The annual payment during the last 8 years was ¥9.31 in 2017, and the most recent fiscal year payment was ¥30.00. This means that it has been growing its distributions at 16% per annum over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

We Could See Founder's Consultants Holdings' Dividend Growing

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Founder's Consultants Holdings has impressed us by growing EPS at 9.7% per year over the past five years. Founder's Consultants Holdings definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Founder's Consultants Holdings' Dividend

Overall, we like to see the dividend staying consistent, and we think Founder's Consultants Holdings might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 2 warning signs for Founder's Consultants Holdings that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.