Nihon M&A Center Holdings (TSE:2127) Has Affirmed Its Dividend Of ¥14.00

Nihon M&A Center Holdings Inc. (TSE:2127) has announced that it will pay a dividend of ¥14.00 per share on the 5th of December. This means the annual payment is 4.1% of the current stock price, which is above the average for the industry.

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Nihon M&A Center Holdings' Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Before this announcement, Nihon M&A Center Holdings was paying out 72% of earnings, but a comparatively small 71% of free cash flows. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment.

Over the next year, EPS is forecast to expand by 7.2%. If recent patterns in the dividend continues, the payout ratio in 12 months could be 90% which is a bit high but can definitely be sustainable.

Check out our latest analysis for Nihon M&A Center Holdings

Nihon M&A Center Holdings Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the dividend has gone from ¥4.00 total annually to ¥29.00. This means that it has been growing its distributions at 22% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Dividend Growth May Be Hard To Achieve

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Nihon M&A Center Holdings hasn't seen much change in its earnings per share over the last five years. Slow growth and a high payout ratio could mean that Nihon M&A Center Holdings has maxed out the amount that it has been able to pay to shareholders. When the rate of return on reinvestment opportunities falls below a certain minimum level, companies often elect to pay a larger dividend instead. This is why many mature companies often have larger dividend yields.

We Really Like Nihon M&A Center Holdings' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for Nihon M&A Center Holdings for free with public analyst estimates for the company. Is Nihon M&A Center Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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