YAKUODO HOLDINGS' (TSE:7679) Shareholders Will Receive A Bigger Dividend Than Last Year

YAKUODO HOLDINGS Co., Ltd. (TSE:7679) has announced that it will be increasing its dividend from last year's comparable payment on the 26th of May to ¥27.00. Although the dividend is now higher, the yield is only 1.2%, which is below the industry average.

See 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. Before making this announcement, YAKUODO HOLDINGS was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 6.3% over the next 12 months. 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 Is Still Building Its Track Record

YAKUODO HOLDINGS' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2018, the dividend has gone from ¥21.00 total annually to ¥27.00. This implies that the company grew its distributions at a yearly rate of about 4.3% over that duration. 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. YAKUODO HOLDINGS has impressed us by growing EPS at 6.3% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Our Thoughts On YAKUODO HOLDINGS' Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. 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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