Yossix HoldingsLtd (TSE:3221) Has Affirmed Its Dividend Of ¥14.00

Yossix Holdings Co.,Ltd.'s (TSE:3221) investors are due to receive a payment of ¥14.00 per share on 1st of December. This means the annual payment is 1.1% of the current stock price, which is above the average for the industry.

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Yossix HoldingsLtd's Projected Earnings Seem Likely To Cover Future Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Yossix HoldingsLtd was paying only paying out a fraction of earnings, but the payment was a massive 2,385% 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.

The next year is set to see EPS grow by 1.5%. Assuming the dividend continues along recent trends, we think the payout ratio could be 16% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Yossix HoldingsLtd

Yossix HoldingsLtd Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The dividend has gone from an annual total of ¥12.00 in 2022 to the most recent total annual payment of ¥28.00. This works out to be a compound annual growth rate (CAGR) of approximately 33% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Yossix HoldingsLtd has seen EPS rising for the last five years, at 23% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

In Summary

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Yossix HoldingsLtd's payments, as there could be some issues with sustaining them into the future. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. We don't think Yossix HoldingsLtd is a great stock to add to your portfolio if income is your focus.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Yossix HoldingsLtd that investors should know about before committing capital to this stock. Is Yossix HoldingsLtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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