YAKUODO HOLDINGS (TSE:7679) Is Paying Out A Larger Dividend Than Last Year

YAKUODO HOLDINGS Co., Ltd.'s (TSE:7679) dividend will be increasing from last year's payment of the same period to ¥27.00 on 26th of May. This takes the annual payment to 1.4% of the current stock price, which is about average for the industry.

View our latest analysis for YAKUODO HOLDINGS

YAKUODO HOLDINGS' Future Dividend Projections Appear Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable. 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.

Looking forward, earnings per share could rise by 6.0% 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 13% by next year, which is in a pretty sustainable range.

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. The dividend has gone from an annual total of ¥21.00 in 2018 to the most recent total annual payment of ¥27.00. This works out to be a compound annual growth rate (CAGR) of approximately 3.7% a year over that time. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

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 YAKUODO HOLDINGS has been growing its earnings per share at 6.0% a 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

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. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

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. Now, if you want to look closer, it would be worth checking out our free research on YAKUODO HOLDINGS management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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