KOMEDA Holdings (TSE:3543) Is Due To Pay A Dividend Of ¥30.00

The board of KOMEDA Holdings Co., Ltd. (TSE:3543) has announced that it will pay a dividend of ¥30.00 per share on the 15th of May. This makes the dividend yield 2.0%, which is above the industry average.

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KOMEDA Holdings' Payment Could Potentially Have Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained. The last dividend was quite easily covered by KOMEDA Holdings' earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Over the next year, EPS is forecast to expand by 10.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 42% by next year, which is in a pretty sustainable range.

Check out our latest analysis for KOMEDA Holdings

KOMEDA Holdings Doesn't Have A Long Payment History

It is great to see that KOMEDA 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. Since 2016, the annual payment back then was ¥50.00, compared to the most recent full-year payment of ¥60.00. This means that it has been growing its distributions at 2.0% per annum over that time. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.

KOMEDA Holdings Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. KOMEDA Holdings has seen EPS rising for the last five years, at 7.0% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Our Thoughts On KOMEDA Holdings' Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for KOMEDA Holdings for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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