Dai-ichi Life Holdings (TSE:8750) Could Be A Buy For Its Upcoming Dividend

It looks like Dai-ichi Life Holdings, Inc. (TSE:8750) is about to go ex-dividend in the next three days. Typically, the ex-dividend date is two business days 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Thus, you can purchase Dai-ichi Life Holdings' shares before the 28th of March in order to receive the dividend, which the company will pay on the 25th of June.

The company's upcoming dividend is JP¥72.00 a share, following on from the last 12 months, when the company distributed a total of JP¥133 per share to shareholders. Based on the last year's worth of payments, Dai-ichi Life Holdings stock has a trailing yield of around 2.9% on the current share price of JP¥4591.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Dai-ichi Life Holdings has been able to grow its dividends, or if the dividend might be cut.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

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. Dai-ichi Life Holdings paid out a comfortable 36% of its profit last year.

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

View our latest analysis for Dai-ichi Life Holdings

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

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Dai-ichi Life Holdings has grown its earnings rapidly, up 21% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Dai-ichi Life Holdings has delivered 18% dividend growth per year on average over the past 10 years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Is Dai-ichi Life Holdings an attractive dividend stock, or better left on the shelf? Companies like Dai-ichi Life Holdings that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. 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, Dai-ichi Life Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in Dai-ichi Life Holdings for the dividends alone, you should always be mindful of the risks involved. For instance, we've identified 2 warning signs for Dai-ichi Life Holdings (1 shouldn't be ignored) you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.