The board of Aica Kogyo Company, Limited (TSE:4206) has announced that it will pay a dividend on the 3rd of December, with investors receiving ¥66.00 per share. This takes the dividend yield to 3.8%, which shareholders will be pleased with.
Aica Kogyo Company's Future Dividend Projections Appear Well Covered By Earnings
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. The last dividend was quite easily covered by Aica Kogyo Company's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.
The next year is set to see EPS grow by 7.5%. If the dividend continues on this path, the payout ratio could be 51% by next year, which we think can be pretty sustainable going forward.
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Aica Kogyo Company 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. The dividend has gone from an annual total of ¥40.00 in 2015 to the most recent total annual payment of ¥136.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
Aica Kogyo Company Could Grow Its Dividend
The company's investors will be pleased to have been receiving dividend income for some time. Aica Kogyo Company has seen EPS rising for the last five years, at 6.7% per annum. 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.
Aica Kogyo Company Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Aica Kogyo Company 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 of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for Aica Kogyo Company 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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