Satudora HoldingsLtd (TSE:3544) Is Due To Pay A Dividend Of ¥10.00

Satudora Holdings Co.,Ltd. (TSE:3544) has announced that it will pay a dividend of ¥10.00 per share on the 12th of August. This payment means the dividend yield will be 1.2%, which is below the average for the industry.

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Satudora HoldingsLtd's Payment Could Potentially Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, prior to this announcement, Satudora HoldingsLtd'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.

If the trend of the last few years continues, EPS will grow by 8.8% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 18%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Satudora HoldingsLtd

Satudora HoldingsLtd Is Still Building Its Track Record

It is great to see that Satudora HoldingsLtd has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from an annual total of ¥9.00 in 2017 to the most recent total annual payment of ¥10.00. This means that it has been growing its distributions at 1.3% per annum over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

We Could See Satudora HoldingsLtd's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Satudora HoldingsLtd has impressed us by growing EPS at 8.8% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Satudora HoldingsLtd Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Satudora HoldingsLtd might even raise payments in the future. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 3 warning signs for Satudora HoldingsLtd 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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