Tokyo Printing Ink Mfg's (TSE:4635) Shareholders Will Receive A Smaller Dividend Than Last Year

Tokyo Printing Ink Mfg. Co., Ltd. (TSE:4635) is reducing its dividend from last year's comparable payment to ¥110.00 on the 29th of June. This means the annual payment is 3.4% of the current stock price, which is above the average for the industry.

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Tokyo Printing Ink Mfg's Payment Could Potentially Have Solid Earnings Coverage

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 Tokyo Printing Ink Mfg's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share could rise by 36.5% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 29%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Tokyo Printing Ink Mfg

Tokyo Printing Ink Mfg Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ¥60.00 in 2015, and the most recent fiscal year payment was ¥240.00. This means that it has been growing its distributions at 15% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Tokyo Printing Ink Mfg has seen EPS rising for the last five years, at 36% per annum. Tokyo Printing Ink Mfg is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

Tokyo Printing Ink Mfg Looks Like A Great Dividend Stock

Overall, we think that Tokyo Printing Ink Mfg could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Tokyo Printing Ink Mfg stock. 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.