WIN-Partners' (TSE:3183) Shareholders Will Receive A Bigger Dividend Than Last Year

WIN-Partners Co., Ltd. (TSE:3183) will increase its dividend from last year's comparable payment on the 30th of June to ¥53.00. This will take the dividend yield to an attractive 4.2%, providing a nice boost to shareholder returns.

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WIN-Partners' Payment Could Potentially Have Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Prior to this announcement, WIN-Partners was quite comfortably covering its dividend with earnings and it was paying more than 75% of its free cash flow to shareholders. The business is earning enough to make the dividend feasible, but the cash payout ratio of 92% indicates it is more focused on returning cash to shareholders than growing the business.

Looking forward, earnings per share could rise by 10.1% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 67% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for WIN-Partners

WIN-Partners Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥16.00 in 2015 to the most recent total annual payment of ¥53.00. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that WIN-Partners has been growing its earnings per share at 10% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Our Thoughts On WIN-Partners' Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. However, lack of cash flows makes us wary of the potential for cuts in the dividend's future, even though the dividend is generally looking okay. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

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. Taking the debate a bit further, we've identified 1 warning sign for WIN-Partners 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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