Pilot's (TSE:7846) Dividend Will Be ¥58.50

Pilot Corporation's (TSE:7846) investors are due to receive a payment of ¥58.50 per share on 2nd of September. This takes the dividend yield to 2.9%, which shareholders will be pleased with.

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Pilot's Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, prior to this announcement, Pilot's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 9.6%. If the dividend continues along recent trends, we estimate the payout ratio will be 37%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Pilot

Pilot Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was ¥10.00 in 2015, and the most recent fiscal year payment was ¥117.00. This means that it has been growing its distributions at 28% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. Earnings has been rising at 2.9% per annum over the last five years, which admittedly is a bit slow. While growth may be thin on the ground, Pilot could always pay out a higher proportion of earnings to increase shareholder returns.

Pilot Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Pilot stock. 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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