Nihon Parkerizing (TSE:4095) Has Announced A Dividend Of ¥25.00

The board of Nihon Parkerizing Co., Ltd. (TSE:4095) has announced that it will pay a dividend of ¥25.00 per share on the 30th of June. This will take the annual payment to 3.9% of the stock price, which is above what most companies in the industry pay.

Nihon Parkerizing's Projected Earnings Seem Likely To Cover Future Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Nihon Parkerizing's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 7.2% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 45% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Nihon Parkerizing

Nihon Parkerizing Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was ¥15.00 in 2015, and the most recent fiscal year payment was ¥50.00. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

We Could See Nihon Parkerizing's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Nihon Parkerizing has impressed us by growing EPS at 7.2% per year over the past five years. Nihon Parkerizing definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Nihon Parkerizing Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Nihon Parkerizing is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Are management backing themselves to deliver performance? Check their shareholdings in Nihon Parkerizing in our latest insider ownership analysis. Is Nihon Parkerizing not quite the opportunity you were looking for? Why not check out 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.