NARUMIYA INTERNATIONAL (TSE:9275) Has Announced That It Will Be Increasing Its Dividend To ¥53.00

NARUMIYA INTERNATIONAL Co., Ltd.'s (TSE:9275) dividend will be increasing from last year's payment of the same period to ¥53.00 on 27th of May. This will take the annual payment to 3.9% of the stock price, which is above what most companies in the industry pay.

Check out our latest analysis for NARUMIYA INTERNATIONAL

NARUMIYA INTERNATIONAL's Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, prior to this announcement, NARUMIYA INTERNATIONAL's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 6.2% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 27% by next year, which is in a pretty sustainable range.

NARUMIYA INTERNATIONAL Is Still Building Its Track Record

NARUMIYA INTERNATIONAL's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2019, the annual payment back then was ¥31.00, compared to the most recent full-year payment of ¥53.00. This works out to be a compound annual growth rate (CAGR) of approximately 9.4% a year over that time. The dividend has been growing as a reasonable rate, which we like. However, investors will probably want to see a longer track record before they consider NARUMIYA INTERNATIONAL to be a consistent dividend paying stock.

We Could See NARUMIYA INTERNATIONAL's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. NARUMIYA INTERNATIONAL has impressed us by growing EPS at 6.2% per year over the past five years. NARUMIYA INTERNATIONAL definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On NARUMIYA INTERNATIONAL's Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

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. As an example, we've identified 1 warning sign for NARUMIYA INTERNATIONAL that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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