Nippon Beet Sugar ManufacturingLtd (TSE:2108) Has Announced That It Will Be Increasing Its Dividend To ¥80.00

Nippon Beet Sugar Manufacturing Co.,Ltd.'s (TSE:2108) dividend will be increasing from last year's payment of the same period to ¥80.00 on 30th of June. This makes the dividend yield 3.5%, which is above the industry average.

View our latest analysis for Nippon Beet Sugar ManufacturingLtd

Nippon Beet Sugar ManufacturingLtd's Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, Nippon Beet Sugar ManufacturingLtd's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

If the trend of the last few years continues, EPS will grow by 31.9% over the next 12 months. If the dividend continues on this path, the payout ratio could be 12% by next year, which we think can be pretty sustainable going forward.

Nippon Beet Sugar ManufacturingLtd Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the annual payment back then was ¥50.00, compared to the most recent full-year payment of ¥80.00. This means that it has been growing its distributions at 4.8% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Nippon Beet Sugar ManufacturingLtd has seen EPS rising for the last five years, at 32% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like Nippon Beet Sugar ManufacturingLtd's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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.

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 Nippon Beet Sugar ManufacturingLtd that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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