Interested In CURVES HOLDINGS' (TSE:7085) Upcoming JP¥8.00 Dividend? You Have Three Days Left

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see CURVES HOLDINGS Co., Ltd. (TSE:7085) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase CURVES HOLDINGS' shares before the 27th of February in order to be eligible for the dividend, which will be paid on the 13th of May.

The company's upcoming dividend is JP¥8.00 a share, following on from the last 12 months, when the company distributed a total of JP¥17.00 per share to shareholders. Calculating the last year's worth of payments shows that CURVES HOLDINGS has a trailing yield of 2.5% on the current share price of JP¥667.00. If you buy this business for its dividend, you should have an idea of whether CURVES HOLDINGS's dividend is reliable and sustainable. As a result, readers should always check whether CURVES HOLDINGS has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for CURVES HOLDINGS

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately CURVES HOLDINGS's payout ratio is modest, at just 35% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. The good news is it paid out just 23% of its free cash flow in the last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're discomforted by CURVES HOLDINGS's 6.7% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. CURVES HOLDINGS has delivered an average of 53% per year annual increase in its dividend, based on the past five years of dividend payments.

To Sum It Up

Is CURVES HOLDINGS an attractive dividend stock, or better left on the shelf? CURVES HOLDINGS has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of CURVES HOLDINGS's dividend merits.

On that note, you'll want to research what risks CURVES HOLDINGS is facing. Our analysis shows 1 warning sign for CURVES HOLDINGS and you should be aware of it before buying any shares.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.