Japan Wool Textile's (TSE:3201) Dividend Will Be Increased To ¥20.00

The Japan Wool Textile Co., Ltd. (TSE:3201) has announced that it will be increasing its dividend from last year's comparable payment on the 26th of February to ¥20.00. This takes the dividend yield to 2.7%, which shareholders will be pleased with.

Check out our latest analysis for Japan Wool Textile

Japan Wool Textile's Earnings Easily Cover The Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. 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.

If the trend of the last few years continues, EPS will grow by 7.4% over the next 12 months. If the dividend continues on this path, the payout ratio could be 30% by next year, which we think can be pretty sustainable going forward.

Japan Wool Textile Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥18.00, compared to the most recent full-year payment of ¥36.00. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

We Could See Japan Wool Textile's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Japan Wool Textile has been growing its earnings per share at 7.4% a 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 of these factors considered, we think this has solid potential as a dividend stock.

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 Japan Wool Textile stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.