Nisshin Seifun Group's (TSE:2002) Shareholders Will Receive A Bigger Dividend Than Last Year

Nisshin Seifun Group Inc. (TSE:2002) will increase its dividend from last year's comparable payment on the 27th of June to ¥30.00. This makes the dividend yield 3.3%, which is above the industry average.

Check out our latest analysis for Nisshin Seifun Group

Nisshin Seifun Group's Payment Could Potentially Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last dividend was quite easily covered by Nisshin Seifun Group's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Looking forward, earnings per share is forecast to rise by 4.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 50%, which is in the range that makes us comfortable with the sustainability of the dividend.

Nisshin Seifun Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥16.53, compared to the most recent full-year payment of ¥60.00. This means that it has been growing its distributions at 14% 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.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Nisshin Seifun Group has seen EPS rising for the last five years, at 6.4% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like Nisshin Seifun Group's Dividend

Overall, a dividend increase is always good, and we think that Nisshin Seifun Group is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Nisshin Seifun Group analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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