TSUKADA GLOBAL HOLDINGS' (TSE:2418) Dividend Will Be ¥5.00

TSUKADA GLOBAL HOLDINGS Inc. (TSE:2418) will pay a dividend of ¥5.00 on the 31st of March. Based on this payment, the dividend yield will be 2.3%, which is fairly typical for the industry.

See our latest analysis for TSUKADA GLOBAL HOLDINGS

TSUKADA GLOBAL HOLDINGS' Projected Earnings Seem Likely To Cover Future Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Based on the last payment, TSUKADA GLOBAL HOLDINGS was paying only paying out a fraction of earnings, but the payment was a massive 712% of cash flows. The business might be trying to strike a balance between returning cash to shareholders and reinvesting back into the business, but this high of a payout ratio could definitely force the dividend to be cut if the company runs into a bit of a tough spot.

If the trend of the last few years continues, EPS will grow by 7.5% over the next 12 months. If the dividend continues on this path, the payout ratio could be 9.2% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. There hasn't been much of a change in the dividend over the last 10 years. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

TSUKADA GLOBAL HOLDINGS Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. TSUKADA GLOBAL HOLDINGS has seen EPS rising for the last five years, at 7.5% per annum. TSUKADA GLOBAL HOLDINGS definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On TSUKADA GLOBAL HOLDINGS' Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. This company is not in the top tier of income providing stocks.

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. To that end, TSUKADA GLOBAL HOLDINGS has 2 warning signs (and 1 which can't be ignored) we think you should know about. Is TSUKADA GLOBAL 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.