The board of Goldwin Inc. (TSE:8111) has announced that it will pay a dividend of ¥40.00 per share on the 4th of December. This makes the dividend yield about the same as the industry average at 1.9%.
See our latest analysis for Goldwin
Goldwin's Earnings Easily Cover The Distributions
We aren't too impressed by dividend yields unless they can be sustained over time. However, Goldwin'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 is forecast to rise by 7.0% over the next year. If the dividend continues on this path, the payout ratio could be 37% by next year, which we think can be pretty sustainable going forward.
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2014, the annual payment back then was ¥8.75, compared to the most recent full-year payment of ¥163.00. This works out to be a compound annual growth rate (CAGR) of approximately 34% 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
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Goldwin has been growing its earnings per share at 20% a year over the past five years. Goldwin definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Goldwin's Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
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. For instance, we've picked out 1 warning sign for Goldwin that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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.
About TSE:8111
Goldwin
Manufactures and sells sports apparel for recreational players and athletes in Japan.
Flawless balance sheet, undervalued and pays a dividend.
