Meiko Network Japan (TSE:4668) Will Pay A Dividend Of ¥13.00

Meiko Network Japan Co., Ltd.'s (TSE:4668) investors are due to receive a payment of ¥13.00 per share on 18th of November. This will take the dividend yield to an attractive 3.6%, providing a nice boost to shareholder returns.

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Meiko Network Japan's Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last dividend, Meiko Network Japan is earning enough to cover the payment, but then it makes up 100% of cash flows. The company might be more focused on returning cash to shareholders, but paying out this much of its cash flow could expose the dividend to being cut in the future.

Looking forward, earnings per share is forecast to rise by 5.5% over the next year. If the dividend continues on this path, the payout ratio could be 60% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Meiko Network Japan

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. The dividend has gone from an annual total of ¥32.00 in 2015 to the most recent total annual payment of ¥26.00. This works out to be a decline of approximately 2.1% per year over that time. A company that decreases its dividend over time generally isn't what we are looking for.

Meiko Network Japan 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. It's encouraging to see that Meiko Network Japan has been growing its earnings per share at 5.8% a year over the past five years. While on an earnings basis, this company looks appealing as an income stock, the cash payout ratio still makes us cautious.

Our Thoughts On Meiko Network Japan's Dividend

Overall, we always like to see the dividend being raised, but we don't think Meiko Network Japan will make a great income stock. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. This company is not in the top tier of income providing stocks.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 Meiko Network Japan that investors should know about before committing capital to this stock. Is Meiko Network Japan not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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