KENKO MayonnaiseLtd's (TSE:2915) Dividend Will Be ¥23.00

KENKO Mayonnaise Co.,Ltd.'s (TSE:2915) investors are due to receive a payment of ¥23.00 per share on 11th of December. This makes the dividend yield 2.5%, which is above the industry average.

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KENKO MayonnaiseLtd's Projected Earnings Seem Likely To Cover Future Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, KENKO MayonnaiseLtd was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 13.4% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 17% by next year, which is in a pretty sustainable range.

Check out our latest analysis for KENKO MayonnaiseLtd

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2015, the dividend has gone from ¥23.00 total annually to ¥47.00. This implies that the company grew its distributions at a yearly rate of about 7.4% over that duration. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. KENKO MayonnaiseLtd might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that KENKO MayonnaiseLtd has grown earnings per share at 13% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for KENKO MayonnaiseLtd's prospects of growing its dividend payments in the future.

We Really Like KENKO MayonnaiseLtd'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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. As an example, we've identified 1 warning sign for KENKO MayonnaiseLtd that you should be aware of before investing. Is KENKO MayonnaiseLtd 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.