SAKURASAKU PLUS,Co.,Ltd. (TSE:7097) Stock Goes Ex-Dividend In Just Three Days

Readers hoping to buy SAKURASAKU PLUS,Co.,Ltd. (TSE:7097) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. Accordingly, SAKURASAKU PLUSCo.Ltd investors that purchase the stock on or after the 30th of January will not receive the dividend, which will be paid on the 15th of April.

The company's upcoming dividend is JP¥12.00 a share, following on from the last 12 months, when the company distributed a total of JP¥24.00 per share to shareholders. Based on the last year's worth of payments, SAKURASAKU PLUSCo.Ltd stock has a trailing yield of around 1.1% on the current share price of JP¥2179.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether SAKURASAKU PLUSCo.Ltd can afford its dividend, and if the dividend could grow.

View our latest analysis for SAKURASAKU PLUSCo.Ltd

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. SAKURASAKU PLUSCo.Ltd paid out just 23% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out 3.0% of its free cash flow as dividends last year, which is conservatively low.

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 how much of its profit SAKURASAKU PLUSCo.Ltd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's not ideal to see SAKURASAKU PLUSCo.Ltd's earnings per share have been shrinking at 5.0% a year over the previous five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. SAKURASAKU PLUSCo.Ltd has delivered 34% dividend growth per year on average over the past three years.

The Bottom Line

Should investors buy SAKURASAKU PLUSCo.Ltd for the upcoming dividend? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.

On that note, you'll want to research what risks SAKURASAKU PLUSCo.Ltd is facing. Our analysis shows 5 warning signs for SAKURASAKU PLUSCo.Ltd that we strongly recommend you have a look at before investing in the company.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.