Aica Kogyo Company (TSE:4206) Is Paying Out A Larger Dividend Than Last Year

Aica Kogyo Company, Limited's (TSE:4206) periodic dividend will be increasing on the 26th of June to ¥66.00, with investors receiving 10% more than last year's ¥60.00. This takes the dividend yield to 3.5%, which shareholders will be pleased with.

See our latest analysis for Aica Kogyo Company

Aica Kogyo Company's Payment Could Potentially Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Aica Kogyo Company was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 6.0%. If the dividend continues on this path, the payout ratio could be 46% by next year, which we think can be pretty sustainable going forward.

Aica Kogyo Company Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥38.00 total annually to ¥116.00. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

We Could See Aica Kogyo Company's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Aica Kogyo Company has impressed us by growing EPS at 5.2% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Aica Kogyo Company's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Aica Kogyo Company for free with public analyst estimates for the company. Is Aica Kogyo Company 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.