Shikoku Kasei Holdings (TSE:4099) Has Announced A Dividend Of ¥14.00

The board of Shikoku Kasei Holdings Corp (TSE:4099) has announced that it will pay a dividend of ¥14.00 per share on the 5th of September. This payment means the dividend yield will be 1.6%, which is below the average for the industry.

See our latest analysis for Shikoku Kasei Holdings

Shikoku Kasei Holdings' Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, Shikoku Kasei Holdings' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 26.2%. If the dividend continues on this path, the payout ratio could be 13% by next year, which we think can be pretty sustainable going forward.

Shikoku Kasei Holdings Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥12.00, compared to the most recent full-year payment of ¥28.00. This means that it has been growing its distributions at 8.8% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

We Could See Shikoku Kasei Holdings' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Shikoku Kasei Holdings has grown earnings per share at 9.8% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Shikoku Kasei Holdings' prospects of growing its dividend payments in the future.

We Really Like Shikoku Kasei Holdings' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Shikoku Kasei Holdings that investors should know about before committing capital to this stock. Is Shikoku Kasei Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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