Japan Wool Textile's (TSE:3201) Dividend Will Be ¥17.00

The Japan Wool Textile Co., Ltd. (TSE:3201) has announced that it will pay a dividend of ¥17.00 per share on the 19th of August. This makes the dividend yield 2.9%, which is above the industry average.

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Japan Wool Textile's Future Dividend Projections Appear Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Japan Wool Textile's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 6.6% 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 32% by next year, which we think can be pretty sustainable going forward.

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Japan Wool Textile Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥18.00 in 2015 to the most recent total annual payment of ¥42.00. This implies that the company grew its distributions at a yearly rate of about 8.8% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

We Could See Japan Wool Textile's Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Japan Wool Textile has impressed us by growing EPS at 6.6% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Japan Wool Textile's prospects of growing its dividend payments in the future.

We Really Like Japan Wool Textile's Dividend

Overall, a dividend increase is always good, and we think that Japan Wool Textile is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Now, if you want to look closer, it would be worth checking out our free research on Japan Wool Textile management tenure, salary, and performance. 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.