A Fresh Look at Nissui (TSE:1332) Valuation After Latest Dividend Increase

Nissui (TSE:1332) just announced a second quarter-end dividend increase to JPY 14.00 per share for the fiscal year ending March 2026, up from JPY 12.00 a year earlier. This higher payout is set to start on December 8, giving investors something new to consider about the company’s approach to rewarding shareholders.

See our latest analysis for Nissui.

Nissui’s recent announcement of a higher dividend appears to have energized its stock. The share price has gained over 12% in the past month and is up 33.6% year-to-date. This momentum builds on a substantial three-year total shareholder return of over 150%. A stronger earnings outlook and solid capital returns have caught investors’ attention.

If the dividend news has you thinking more broadly about potential winners, now might be the perfect moment to discover fast growing stocks with high insider ownership.

With shares already up strongly this year and the dividend boost reflecting confidence, the question now is whether Nissui remains undervalued or if the market has already priced in its next wave of growth.

Price-to-Earnings of 13.2x: Is it justified?

Nissui’s shares are trading at a price-to-earnings (P/E) ratio of 13.2x, well below both peer and industry averages, despite the stock’s recent surge. This suggests the market still sees value in Nissui compared to competitors at today’s price of ¥1,177.5.

The price-to-earnings multiple is a key measure of how much investors are willing to pay for each yen of company earnings. For Nissui, this relatively low P/E implies investors are not pricing in strong future earnings growth, which can be typical for mature food sector businesses.

But is this pricing fair? Nissui’s P/E is not only cheaper than peer averages (27.4x) and the broader Japanese food industry (16.5x), but also below what regression analysis suggests its fair value should be (18.1x). This positions Nissui as an undervalued outlier within its sector, especially when factoring in its recent earnings momentum.

Explore the SWS fair ratio for Nissui

Result: Price-to-Earnings of 13.2x (UNDERVALUED)

However, slower revenue growth or unexpected shifts in sector demand could limit further upside and challenge the recent optimism around Nissui’s valuation.

Find out about the key risks to this Nissui narrative.

Another View: What Does Our DCF Model Suggest?

Looking at the situation from a different perspective, the SWS DCF model indicates that Nissui’s shares may be even more undervalued than suggested by the earlier multiple-based analysis. At ¥1,177.5, the stock trades well below our estimated fair value of ¥2,123.83, which highlights a significant discount.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nissui for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 874 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Nissui Narrative

If you want a different perspective or prefer to dive into the details on your own, you can quickly build your own view in just a few minutes, and Do it your way.

A great starting point for your Nissui research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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