Asahi Kasei (TSE:3407) Will Pay A Dividend Of ¥20.00

The board of Asahi Kasei Corporation (TSE:3407) has announced that it will pay a dividend on the 2nd of December, with investors receiving ¥20.00 per share. This makes the dividend yield 3.9%, which is above the industry average.

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Asahi Kasei's Projected Earnings Seem Likely To Cover Future Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Asahi Kasei was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 10.6% over the next year. If the dividend continues on this path, the payout ratio could be 39% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Asahi Kasei

Asahi Kasei Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the dividend has gone from ¥17.00 total annually to ¥40.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.9% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

Asahi Kasei Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Asahi Kasei has impressed us by growing EPS at 5.8% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Asahi Kasei's Dividend

Overall, a dividend increase is always good, and we think that Asahi Kasei is a strong income stock thanks to its track record and growing earnings. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 12 analysts we track are forecasting for Asahi Kasei for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.