Kisoji's (TSE:8160) Dividend Will Be ¥12.00

The board of Kisoji Co., Ltd. (TSE:8160) has announced that it will pay a dividend on the 30th of June, with investors receiving ¥12.00 per share. This takes the dividend yield to 1.2%, which shareholders will be pleased with.

View our latest analysis for Kisoji

Kisoji's Projections Indicate Future Payments May Be Unsustainable

Estimates Indicate Kisoji's Could Struggle to Maintain Dividend Payments In The Future

Kisoji's Future Dividends May Potentially Be At Risk

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Kisoji isn't generating any profits, and it is paying out a very high proportion of the cash it is earning. This makes us feel that the dividend will be hard to maintain.

EPS is set to grow by 109.2% over the next year if recent trends continue. If the dividend continues on its recent course, the payout ratio in 12 months could be 20,891%, which is a bit high and could start applying pressure to the balance sheet.

Kisoji Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2021, the dividend has gone from ¥15.00 total annually to ¥24.00. This means that it has been growing its distributions at 12% per annum over that time. Kisoji has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Company Could Face Some Challenges Growing The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Kisoji has seen EPS rising for the last five years, at 109% per annum. While the company hasn't yet recorded a profit, the growth rates are healthy. If the company can turn a profit relatively soon, we can see this becoming a reliable income stock.

The Dividend Could Prove To Be Unreliable

Overall, we always like to see the dividend being raised, but we don't think Kisoji will make a great income stock. In general, the distributions are a little bit higher than we would like, but we can't ignore the fact the quickly growing earnings gives this stock great potential in the future. We don't think Kisoji is a great stock to add to your portfolio if income is your focus.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Kisoji stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.