Kurotani (TSE:3168) Has Announced A Dividend Of ¥10.00

The board of Kurotani Corporation (TSE:3168) has announced that it will pay a dividend of ¥10.00 per share on the 25th of November. This payment means that the dividend yield will be 2.8%, which is around the industry average.

Check out our latest analysis for Kurotani

Kurotani Is Paying Out More Than It Is Earning

Solid dividend yields are great, but they only really help us if the payment is sustainable. The last dividend was quite easily covered by Kurotani's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

EPS is set to grow by 19.8% over the next year if recent trends continue. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 122% over the next year.

Kurotani Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. Since 2016, the annual payment back then was ¥5.00, compared to the most recent full-year payment of ¥20.00. This means that it has been growing its distributions at 19% per annum over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Kurotani has grown earnings per share at 20% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Kurotani Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Kurotani might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 4 warning signs for Kurotani that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield 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.

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