ITOCHU-SHOKUHIN's (TSE:2692) Dividend Will Be ¥60.00

The board of ITOCHU-SHOKUHIN Co., Ltd. (TSE:2692) has announced that it will pay a dividend on the 27th of November, with investors receiving ¥60.00 per share. This makes the dividend yield about the same as the industry average at 1.7%.

Check out our latest analysis for ITOCHU-SHOKUHIN

ITOCHU-SHOKUHIN's Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. Before making this announcement, ITOCHU-SHOKUHIN was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

If the trend of the last few years continues, EPS will grow by 14.8% over the next 12 months. If the dividend continues on this path, the payout ratio could be 21% by next year, which we think can be pretty sustainable going forward.

ITOCHU-SHOKUHIN Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was ¥68.00, compared to the most recent full-year payment of ¥120.00. This means that it has been growing its distributions at 5.8% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that ITOCHU-SHOKUHIN has been growing its earnings per share at 15% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for ITOCHU-SHOKUHIN's prospects of growing its dividend payments in the future.

ITOCHU-SHOKUHIN 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 of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in ITOCHU-SHOKUHIN stock. Is ITOCHU-SHOKUHIN not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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