NIPPON KANZAI HoldingsLtd (TSE:9347) Is Paying Out A Dividend Of ¥27.00

NIPPON KANZAI Holdings Co.,Ltd. (TSE:9347) has announced that it will pay a dividend of ¥27.00 per share on the 23rd of June. Based on this payment, the dividend yield will be 2.1%, which is fairly typical for the industry.

View our latest analysis for NIPPON KANZAI HoldingsLtd

NIPPON KANZAI HoldingsLtd's Future Dividend Projections Appear Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. However, prior to this announcement, NIPPON KANZAI HoldingsLtd'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.

Looking forward, earnings per share could rise by 0.7% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 43% by next year, which we think can be pretty sustainable going forward.

NIPPON KANZAI HoldingsLtd Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of ¥20.00 in 2014 to the most recent total annual payment of ¥54.00. This means that it has been growing its distributions at 10% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

NIPPON KANZAI HoldingsLtd 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. Although it's important to note that NIPPON KANZAI HoldingsLtd'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. While growth may be thin on the ground, NIPPON KANZAI HoldingsLtd could always pay out a higher proportion of earnings to increase shareholder returns.

NIPPON KANZAI HoldingsLtd Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think NIPPON KANZAI HoldingsLtd 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Are management backing themselves to deliver performance? Check their shareholdings in NIPPON KANZAI HoldingsLtd in our latest insider ownership analysis. 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.