NIPPON KANZAI HoldingsLtd (TSE:9347) Will Pay A Dividend Of ¥27.00

NIPPON KANZAI Holdings Co.,Ltd.'s (TSE:9347) investors are due to receive a payment of ¥27.00 per share on 23rd of June. This means the dividend yield will be fairly typical at 2.1%.

Check out our latest analysis for NIPPON KANZAI HoldingsLtd

NIPPON KANZAI HoldingsLtd's Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. The last dividend was quite easily covered by NIPPON KANZAI HoldingsLtd's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Over the next year, EPS could expand by 0.7% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 43%, which is in the range that makes us comfortable with the sustainability of the dividend.

NIPPON KANZAI HoldingsLtd Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥20.00 total annually to ¥54.00. This implies that the company grew its distributions at a yearly rate of about 10% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

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. Unfortunately, NIPPON KANZAI HoldingsLtd's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. Growth of 0.7% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend 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. Now, if you want to look closer, it would be worth checking out our free research on NIPPON KANZAI HoldingsLtd management tenure, salary, and performance. 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.