Kaneko Seeds (TSE:1376) Has Announced A Dividend Of ¥11.00

The board of Kaneko Seeds Co., Ltd. (TSE:1376) has announced that it will pay a dividend on the 5th of February, with investors receiving ¥11.00 per share. This makes the dividend yield 2.4%, which will augment investor returns quite nicely.

Check out our latest analysis for Kaneko Seeds

Kaneko Seeds' Future Dividend Projections Appear Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Kaneko Seeds' dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Unless the company can turn things around, EPS could fall by 0.8% over the next year. Assuming the dividend continues along recent trends, we believe the payout ratio could be 32%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Kaneko Seeds Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥22.00, compared to the most recent full-year payment of ¥33.00. This implies that the company grew its distributions at a yearly rate of about 4.1% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

Kaneko Seeds May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. However, Kaneko Seeds' EPS was effectively flat over the past five years, which could stop the company from paying more every year.

Our Thoughts On Kaneko Seeds' Dividend

Overall, a consistent dividend is a good thing, and we think that Kaneko Seeds has the ability to continue this into the future. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

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. Now, if you want to look closer, it would be worth checking out our free research on Kaneko Seeds management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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