Kohsoku (TSE:7504) Has Announced A Dividend Of ¥27.00

Kohsoku Corporation (TSE:7504) will pay a dividend of ¥27.00 on the 2nd of December. This takes the annual payment to 2.3% of the current stock price, which is about average for the industry.

See our latest analysis for Kohsoku

Kohsoku's Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Kohsoku's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 5.5% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 35%, which is in the range that makes us comfortable with the sustainability of the dividend.

Kohsoku Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from ¥21.00 total annually to ¥54.00. This means that it has been growing its distributions at 9.9% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

We Could See Kohsoku's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Kohsoku has impressed us by growing EPS at 5.5% 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 Kohsoku'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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. See if management have their own wealth at stake, by checking insider shareholdings in Kohsoku stock. Is Kohsoku 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.