Ki-Star Real EstateLtd (TSE:3465) Has Announced That It Will Be Increasing Its Dividend To ¥100.00

Ki-Star Real Estate Co.,Ltd's (TSE:3465) dividend will be increasing from last year's payment of the same period to ¥100.00 on 8th of December. This takes the dividend yield to 4.2%, which shareholders will be pleased with.

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Ki-Star Real EstateLtd's Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Ki-Star Real EstateLtd is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

Looking forward, earnings per share is forecast to rise by 15.9% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 32%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for Ki-Star Real EstateLtd

Ki-Star Real EstateLtd's Dividend Has Lacked Consistency

Looking back, Ki-Star Real EstateLtd's dividend hasn't been particularly consistent. This suggests that the dividend might not be the most reliable. Since 2016, the annual payment back then was ¥42.50, compared to the most recent full-year payment of ¥200.00. This works out to be a compound annual growth rate (CAGR) of approximately 19% a year over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Ki-Star Real EstateLtd has seen EPS rising for the last five years, at 18% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Ki-Star Real EstateLtd's prospects of growing its dividend payments in the future.

Our Thoughts On Ki-Star Real EstateLtd's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for Ki-Star Real EstateLtd (1 doesn't sit too well with us!) that you should be aware of before investing. Is Ki-Star Real EstateLtd not quite the opportunity you were looking for? Why not check out our selection of top 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.