AXXZIA (TSE:4936) Has Announced A Dividend Of ¥10.00

AXXZIA Inc. (TSE:4936) has announced that it will pay a dividend of ¥10.00 per share on the 11th of October. The dividend yield will be in the average range for the industry at 1.8%.

View our latest analysis for AXXZIA

AXXZIA's Earnings Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Prior to this announcement, AXXZIA's dividend was only 28% of earnings, however it was paying out 122% of free cash flows. While the business may be attempting to set a balanced dividend policy, a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.

Looking forward, earnings per share is forecast to rise by 61.8% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 24% by next year, which is in a pretty sustainable range.

AXXZIA Is Still Building Its Track Record

Without a track record of dividend payments, we can't make a judgement on how stable it has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

AXXZIA Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. AXXZIA has seen EPS rising for the last five years, at 5.5% per annum. AXXZIA definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

In Summary

In summary, dividends being cut isn't ideal, however it can bring the payment into a more sustainable range. While AXXZIA is earning enough to cover the payments, the cash flows are lacking. Overall, we don't think this company has the makings of a good income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for AXXZIA that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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