Kakaku.com (TSE:2371) Is Increasing Its Dividend To ¥55.00

Kakaku.com, Inc. (TSE:2371) will increase its dividend from last year's comparable payment on the 20th of June to ¥55.00. This makes the dividend yield 2.4%, which is above the industry average.

View our latest analysis for Kakaku.com

Kakaku.com's Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Prior to this announcement, Kakaku.com's dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Earnings per share is forecast to rise by 11.3% over the next year. If recent patterns in the dividend continues, the payout ratio in 12 months could be 76% which is a bit high but can definitely be sustainable.

Kakaku.com Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥12.50 total annually to ¥60.00. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Kakaku.com May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings per share has been crawling upwards at 3.1% per year. The company has been growing at a pretty soft 3.1% per annum, and is paying out quite a lot of its earnings to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.

We Really Like Kakaku.com's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 11 analysts we track are forecasting for Kakaku.com for free with public analyst estimates for the company. Is Kakaku.com not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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