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

The board of Yossix Holdings Co.,Ltd. (TSE:3221) has announced that it will pay a dividend on the 1st of December, with investors receiving ¥14.00 per share. 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 Payment Could Potentially Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, Yossix HoldingsLtd's dividend was only 15% of earnings, however it was paying out 2,385% of free cash flows. While the business may be attempting to set a balanced dividend policy, a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.

The next year is set to see EPS grow by 1.5%. If the dividend continues on this path, the payout ratio could be 16% by next year, which we think can be pretty sustainable going forward.

View 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. Since 2022, the annual payment back then was ¥12.00, compared to the most recent full-year 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Yossix HoldingsLtd has impressed us by growing EPS at 23% per year over the past five years. 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.

Our Thoughts On Yossix HoldingsLtd's Dividend

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. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We don't think Yossix HoldingsLtd is a great stock to add to your portfolio if income is your focus.

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. Taking the debate a bit further, we've identified 1 warning sign for Yossix HoldingsLtd that investors need to be conscious of moving forward. 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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