NARUMIYA INTERNATIONAL's (TSE:9275) Dividend Will Be Increased 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 4.2% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for NARUMIYA INTERNATIONAL

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

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, NARUMIYA INTERNATIONAL's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share could rise by 8.2% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.

NARUMIYA INTERNATIONAL Doesn't Have A Long Payment History

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The annual payment during the last 5 years was ¥31.00 in 2019, and the most recent fiscal year payment was ¥53.00. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that NARUMIYA INTERNATIONAL has been growing its earnings per share at 8.2% a 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.

NARUMIYA INTERNATIONAL Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 2 warning signs for NARUMIYA INTERNATIONAL that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of 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.