Four Days Left To Buy FP Partner Inc. (TSE:7388) Before The Ex-Dividend Date

Readers hoping to buy FP Partner Inc. (TSE:7388) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase FP Partner's shares on or after the 27th of November will not receive the dividend, which will be paid on the 2nd of March.

The company's next dividend payment will be JP¥47.00 per share, on the back of last year when the company paid a total of JP¥94.00 to shareholders. Last year's total dividend payments show that FP Partner has a trailing yield of 4.0% on the current share price of JP¥2377.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. FP Partner paid out 93% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances.

Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.

View our latest analysis for FP Partner

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see FP Partner has grown its earnings rapidly, up 36% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past two years, FP Partner has increased its dividend at approximately 12% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Has FP Partner got what it takes to maintain its dividend payments? FP Partner has been generating credible earnings per share growth, although its dividend payments were not adequately covered by earnings. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you want to look further into FP Partner, it's worth knowing the risks this business faces. Be aware that FP Partner is showing 2 warning signs in our investment analysis, and 1 of those is significant...

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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.