Fujibo Holdings (TSE:3104) Is Increasing Its Dividend To ¥75.00

The board of Fujibo Holdings, Inc. (TSE:3104) has announced that it will be paying its dividend of ¥75.00 on the 8th of December, an increased payment from last year's comparable dividend. This makes the dividend yield 2.5%, which is above the industry average.

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Fujibo Holdings' Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, based ont he last payment, Fujibo Holdings was earning enough to cover the dividend pretty comfortably. However, with more than 75% of free cash flow being paid out to shareholders, future growth could potentially be constrained.

The next year is set to see EPS grow by 11.8%. Assuming the dividend continues along recent trends, we think the payout ratio could be 32% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Fujibo Holdings

Fujibo Holdings Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was ¥60.00 in 2015, and the most recent fiscal year payment was ¥150.00. This implies that the company grew its distributions at a yearly rate of about 9.6% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Fujibo Holdings has been growing its earnings per share at 12% a year over the past five years. Fujibo Holdings definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On Fujibo Holdings' Dividend

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. However, lack of cash flows makes us wary of the potential for cuts in the dividend's future, even though the dividend is generally looking okay. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. See if management have their own wealth at stake, by checking insider shareholdings in Fujibo Holdings stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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