Daiken Medical's (TSE:7775) Dividend Will Be ¥9.00

Daiken Medical Co., Ltd.'s (TSE:7775) investors are due to receive a payment of ¥9.00 per share on 2nd of December. The dividend yield will be 4.3% based on this payment which is still above the industry average.

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Daiken Medical's Long-term Dividend Outlook appears Promising

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, Daiken Medical's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 3.9% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 62% by next year, which is in a pretty sustainable range.

View our latest analysis for Daiken Medical

Daiken Medical's Dividend Has Lacked Consistency

It's comforting to see that Daiken Medical has been paying a dividend for a number of years now, however it has been cut at least once in that time. This suggests that the dividend might not be the most reliable. The dividend has gone from an annual total of ¥21.00 in 2017 to the most recent total annual payment of ¥20.00. Payments have been decreasing at a very slow pace in this time period. A company that decreases its dividend over time generally isn't what we are looking for.

Daiken Medical Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Daiken Medical has impressed us by growing EPS at 6.1% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Daiken Medical's prospects of growing its dividend payments in the future.

Our Thoughts On Daiken Medical's Dividend

Overall, we think Daiken Medical is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for Daiken Medical that investors should take into consideration. Is Daiken Medical 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.