CEDAR.Co.,Ltd. (TSE:2435) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Readers hoping to buy CEDAR.Co.,Ltd. (TSE:2435) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Thus, you can purchase CEDAR.Co.Ltd's shares before the 28th of March in order to receive the dividend, which the company will pay on the 23rd of June.

The company's next dividend payment will be JP¥10.00 per share. Last year, in total, the company distributed JP¥6.00 to shareholders. Looking at the last 12 months of distributions, CEDAR.Co.Ltd has a trailing yield of approximately 2.4% on its current stock price of JP¥248.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether CEDAR.Co.Ltd can afford its dividend, and if the dividend could grow.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. CEDAR.Co.Ltd has a low and conservative payout ratio of just 20% of its income after tax.

Check out our latest analysis for CEDAR.Co.Ltd

Click here to see how much of its profit CEDAR.Co.Ltd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see CEDAR.Co.Ltd's earnings have been skyrocketing, up 70% per annum for the past five years. CEDAR.Co.Ltd earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, CEDAR.Co.Ltd has increased its dividend at approximately 4.1% a year on average. Earnings per share have been growing much quicker than dividends, potentially because CEDAR.Co.Ltd is keeping back more of its profits to grow the business.

To Sum It Up

Should investors buy CEDAR.Co.Ltd for the upcoming dividend? Companies like CEDAR.Co.Ltd that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. CEDAR.Co.Ltd ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks CEDAR.Co.Ltd is facing. For example, CEDAR.Co.Ltd has 4 warning signs (and 1 which is significant) we think you should know about.

If you're in the market for strong dividend payers, we recommend checking 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.