YAKUODO HOLDINGS (TSE:7679) Has Announced That It Will Be Increasing Its Dividend To ¥27.00

YAKUODO HOLDINGS Co., Ltd. (TSE:7679) will increase its dividend from last year's comparable payment on the 26th of May to ¥27.00. Even though the dividend went up, the yield is still quite low at only 1.1%.

View our latest analysis for YAKUODO HOLDINGS

YAKUODO HOLDINGS' Future Dividend Projections Appear Well Covered By Earnings

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, YAKUODO HOLDINGS' 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 5.7% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 13%, which is in the range that makes us comfortable with the sustainability of the dividend.

YAKUODO HOLDINGS Doesn't Have A Long Payment History

It is great to see that YAKUODO HOLDINGS 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. Since 2018, the dividend has gone from ¥21.00 total annually to ¥27.00. This means that it has been growing its distributions at 4.3% 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 YAKUODO HOLDINGS' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. YAKUODO HOLDINGS has impressed us by growing EPS at 5.7% 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.

In Summary

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in YAKUODO HOLDINGS stock. Is YAKUODO HOLDINGS not quite the opportunity you were looking for? Why not check out our selection of top 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.