Ship Healthcare Holdings' (TSE:3360) Shareholders Will Receive A Bigger Dividend Than Last Year

Ship Healthcare Holdings, Inc. (TSE:3360) will increase its dividend from last year's comparable payment on the 1st of July to ¥48.00. This takes the annual payment to 2.0% of the current stock price, which is about average for the industry.

View our latest analysis for Ship Healthcare Holdings

Ship Healthcare Holdings' Dividend Is Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Ship Healthcare Holdings was easily earning enough to 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 49.1%. If the dividend continues on this path, the payout ratio could be 28% by next year, which we think can be pretty sustainable going forward.

Ship Healthcare Holdings Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from ¥17.50 total annually to ¥43.00. This implies that the company grew its distributions at a yearly rate of about 9.4% 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.

Dividend Growth May Be Hard To Achieve

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings per share has been crawling upwards at 4.8% per year. While EPS growth is quite low, Ship Healthcare Holdings has the option to increase the payout ratio to return more cash to shareholders.

Ship Healthcare Holdings Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Ship Healthcare Holdings is a strong income stock thanks to its track record and growing earnings. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Ship Healthcare Holdings analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Ship Healthcare Holdings 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.