Three Days Left To Buy Roland Corporation (TSE:7944) Before The Ex-Dividend Date

Roland Corporation (TSE:7944) is about to trade ex-dividend in the next 3 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Roland's shares on or after the 27th of December will not receive the dividend, which will be paid on the 27th of March.

The company's next dividend payment will be JP¥85.00 per share, and in the last 12 months, the company paid a total of JP¥170 per share. Based on the last year's worth of payments, Roland stock has a trailing yield of around 4.4% on the current share price of JP¥3870.00. If you buy this business for its dividend, you should have an idea of whether Roland's dividend is reliable and sustainable. As a result, readers should always check whether Roland has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Roland

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Roland paid out more than half (70%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Dividends consumed 71% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's positive to see that Roland's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Roland's earnings per share have risen 16% per annum over the last five years. Roland is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. This is a reasonable combination that could hint at some further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Roland has delivered 28% dividend growth per year on average over the past 10 years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

To Sum It Up

Is Roland worth buying for its dividend? Higher earnings per share generally lead to higher dividends from dividend-paying stocks over the long run. That's why we're glad to see Roland's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 70% and 71% respectively. In summary, it's hard to get excited about Roland from a dividend perspective.

In light of that, while Roland has an appealing dividend, it's worth knowing the risks involved with this stock. For example - Roland has 1 warning sign we think you should be aware of.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.