Taiheiyo Cement's (TSE:5233) Dividend Will Be Increased To ¥50.00

Taiheiyo Cement Corporation's (TSE:5233) dividend will be increasing from last year's payment of the same period to ¥50.00 on 3rd of December. The payment will take the dividend yield to 2.6%, which is in line with the average for the industry.

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Taiheiyo Cement's Future Dividend Projections Appear Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. However, prior to this announcement, Taiheiyo Cement's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 7.9%. If the dividend continues on this path, the payout ratio could be 19% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Taiheiyo Cement

Taiheiyo Cement Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥60.00 total annually to ¥100.00. This works out to be a compound annual growth rate (CAGR) of approximately 5.2% a year 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.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Taiheiyo Cement has been growing its earnings per share at 8.6% a year over the past five years. Taiheiyo Cement definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Taiheiyo Cement Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Taiheiyo Cement that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield 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.