FP Partner Inc. (TSE:7388) Looks Interesting, And It's About To Pay A Dividend

It looks like FP Partner Inc. (TSE:7388) is about to go ex-dividend in the next three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase FP Partner's shares before the 28th of November in order to receive the dividend, which the company will pay on the 14th of February.

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. Looking at the last 12 months of distributions, FP Partner has a trailing yield of approximately 3.2% on its current stock price of JP¥2951.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for FP Partner

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. FP Partner paid out a comfortable 26% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

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. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see FP Partner has grown its earnings rapidly, up 52% a year for the past five years.

Given that FP Partner has only been paying a dividend for a year, there's not much of a past history to draw insight from.

Final Takeaway

From a dividend perspective, should investors buy or avoid FP Partner? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, FP Partner looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while FP Partner has an appealing dividend, it's worth knowing the risks involved with this stock. Case in point: We've spotted 1 warning sign for FP Partner you should be aware of.

If you're in the market for strong dividend payers, we recommend checking 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.