Kohsoku's (TSE:7504) Dividend Will Be ¥27.00

Kohsoku Corporation (TSE:7504) will pay a dividend of ¥27.00 on the 2nd of December. This takes the annual payment to 2.5% of the current stock price, which is about average for the industry.

See our latest analysis for Kohsoku

Kohsoku's Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, prior to this announcement, Kohsoku'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.

Looking forward, earnings per share could rise by 5.5% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 35% by next year, which is in a pretty sustainable range.

Kohsoku Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of ¥21.00 in 2014 to the most recent total annual payment of ¥54.00. This implies that the company grew its distributions at a yearly rate of about 9.9% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

Kohsoku Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Kohsoku has seen EPS rising for the last five years, at 5.5% per annum. Kohsoku definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Kohsoku Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Kohsoku is a strong income stock thanks to its track record and growing earnings. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Kohsoku management tenure, salary, and performance. 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.