Fast Fitness Japan (TSE:7092) Has Announced A Dividend Of ¥15.00

Fast Fitness Japan Incorporated (TSE:7092) has announced that it will pay a dividend of ¥15.00 per share on the 10th of June. This means the annual payment is 2.6% of the current stock price, which is above the average for the industry.

View our latest analysis for Fast Fitness Japan

Fast Fitness Japan's Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Before making this announcement, Fast Fitness Japan was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 8.4%. If the dividend continues on this path, the payout ratio could be 32% by next year, which we think can be pretty sustainable going forward.

Fast Fitness Japan's Dividend Has Lacked Consistency

Even in its short history, we have seen the dividend cut. Since 2021, the dividend has gone from ¥12.82 total annually to ¥25.00. This means that it has been growing its distributions at 25% per annum over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Fast Fitness Japan has seen EPS rising for the last five years, at 11% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Fast Fitness Japan Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 Fast Fitness Japan that investors should know about before committing capital to this stock. Is Fast Fitness Japan not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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