Suntory Beverage & Food (TSE:2587) Has Announced A Dividend Of ¥55.00

The board of Suntory Beverage & Food Limited (TSE:2587) has announced that it will pay a dividend of ¥55.00 per share on the 28th of March. This makes the dividend yield about the same as the industry average at 2.2%.

See our latest analysis for Suntory Beverage & Food

Suntory Beverage & Food's Projected Earnings Seem Likely To Cover Future Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, Suntory Beverage & Food's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 4.4%. Assuming the dividend continues along recent trends, we think the payout ratio could be 34% by next year, which is in a pretty sustainable range.

Suntory Beverage & Food Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥58.00, compared to the most recent full-year payment of ¥114.00. This implies that the company grew its distributions at a yearly rate of about 7.0% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Suntory Beverage & Food has been growing its earnings per share at 6.5% a year over the past five years. Suntory Beverage & Food definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Suntory Beverage & Food Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 9 Suntory Beverage & Food analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Suntory Beverage & Food not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.