CE HoldingsLtd's (TSE:4320) Shareholders Will Receive A Bigger Dividend Than Last Year

CE Holdings Co.,Ltd. (TSE:4320) will increase its dividend from last year's comparable payment on the 23rd of December to ¥22.00. This will take the annual payment to 3.2% of the stock price, which is above what most companies in the industry pay.

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CE HoldingsLtd'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. Based on the last payment, CE HoldingsLtd was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Looking forward, could fall by 1.2% if the company can't turn things around from the last few years. Assuming the dividend continues along recent trends, we think the payout ratio could reach 88%, which is definitely on the higher side.

See our latest analysis for CE HoldingsLtd

CE HoldingsLtd Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ¥4.25 in 2015, and the most recent fiscal year payment was ¥22.00. This means that it has been growing its distributions at 18% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. However, CE HoldingsLtd's EPS was effectively flat over the past five years, which could stop the company from paying more every year.

Our Thoughts On CE HoldingsLtd's Dividend

Overall, this is a reasonable dividend, and it being raised is an added bonus. The earnings coverage is acceptable for now, but with earnings on the decline we would definitely keep an eye on the payout ratio. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 2 warning signs for CE HoldingsLtd that you should be aware of before investing. Is CE HoldingsLtd 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.