Mitsuuroko Group Holdings Co.,Ltd. (TSE:8131) Looks Interesting, And It's About To Pay A Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Mitsuuroko Group Holdings Co.,Ltd. (TSE:8131) is about to go ex-dividend in just 3 days. The ex-dividend date is usually set to be two business days 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase Mitsuuroko Group HoldingsLtd's shares before the 28th of March in order to receive the dividend, which the company will pay on the 19th of June.

The company's upcoming dividend is JP¥41.00 a share, following on from the last 12 months, when the company distributed a total of JP¥41.00 per share to shareholders. Looking at the last 12 months of distributions, Mitsuuroko Group HoldingsLtd has a trailing yield of approximately 2.1% on its current stock price of JP¥1956.00. If you buy this business for its dividend, you should have an idea of whether Mitsuuroko Group HoldingsLtd's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see Mitsuuroko Group HoldingsLtd paying out a modest 31% of its earnings. 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. Over the last year it paid out 52% of its free cash flow as dividends, within the usual range for most companies.

It's positive to see that Mitsuuroko Group HoldingsLtd's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Check out our latest analysis for Mitsuuroko Group HoldingsLtd

Click here to see how much of its profit Mitsuuroko Group HoldingsLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Mitsuuroko Group HoldingsLtd has grown its earnings rapidly, up 21% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Mitsuuroko Group HoldingsLtd has delivered an average of 9.9% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

From a dividend perspective, should investors buy or avoid Mitsuuroko Group HoldingsLtd? Earnings per share have grown at a nice rate in recent times and over the last year, Mitsuuroko Group HoldingsLtd paid out less than half its earnings and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research.

Want to learn more about Mitsuuroko Group HoldingsLtd? Here's a visualisation of its historical rate of revenue and earnings growth.

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.