San-Ai Obbli Co., Ltd.'s (TSE:8097) investors are due to receive a payment of ¥50.00 per share on 27th of June. This makes the dividend yield 5.4%, which will augment investor returns quite nicely.
View our latest analysis for San-Ai Obbli
San-Ai Obbli's 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. San-Ai Obbli is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.
Over the next year, EPS could expand by 8.3% if recent trends continue. If the dividend continues on this path, the payout ratio could be 66% by next year, which we think can be pretty sustainable going forward.
San-Ai Obbli Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the dividend has gone from ¥13.50 total annually to ¥100.00. This implies that the company grew its distributions at a yearly rate of about 22% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
San-Ai Obbli Could Grow Its Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. San-Ai Obbli has seen EPS rising for the last five years, at 8.3% per annum. San-Ai Obbli definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Our Thoughts On San-Ai Obbli's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While San-Ai Obbli is earning enough to cover the payments, the cash flows are lacking. This company is not in the top tier of income providing stocks.
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. Taking the debate a bit further, we've identified 1 warning sign for San-Ai Obbli that investors need to be conscious of moving forward. Is San-Ai Obbli not quite the opportunity you were looking for? Why not check out 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.
About TSE:8097
San-Ai Obbli
Engages in the wholesale and retail of petroleum products and liquefied petroleum (LP) gas.
Flawless balance sheet established dividend payer.
