KOMEDA Holdings (TSE:3543) Will Pay A Larger Dividend Than Last Year At ¥30.00

KOMEDA Holdings Co., Ltd. (TSE:3543) has announced that it will be increasing its dividend from last year's comparable payment on the 26th of November to ¥30.00. This takes the dividend yield to 2.0%, which shareholders will be pleased with.

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KOMEDA Holdings' Projected Earnings Seem Likely To Cover Future Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Based on the last payment, KOMEDA Holdings was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 7.0%. If the dividend continues on this path, the payout ratio could be 42% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for KOMEDA Holdings

KOMEDA Holdings Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. Since 2016, the dividend has gone from ¥50.00 total annually to ¥60.00. This implies that the company grew its distributions at a yearly rate of about 2.0% over that duration. 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.

The Dividend's Growth Prospects Are Limited

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings per share has been crawling upwards at 5.0% per year. KOMEDA Holdings is struggling to find viable investments, so it is returning more to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.

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. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. 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. Is KOMEDA Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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