Beaglee (TSE:3981) Will Pay A Larger Dividend Than Last Year At ¥17.00

Beaglee Inc.'s (TSE:3981) periodic dividend will be increasing on the 31st of March to ¥17.00, with investors receiving 13% more than last year's ¥15.00. Based on this payment, the dividend yield for the company will be 1.1%, which is fairly typical for the industry.

See our latest analysis for Beaglee

Beaglee's Payment Could Potentially Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, prior to this announcement, Beaglee's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 11.7% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 13% by next year, which we think can be pretty sustainable going forward.

Beaglee Is Still Building Its Track Record

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2021, the annual payment back then was ¥12.00, compared to the most recent full-year payment of ¥15.00. This means that it has been growing its distributions at 7.7% per annum over that time. Beaglee has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.

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. Beaglee has impressed us by growing EPS at 12% per year over the past five years. Beaglee definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Beaglee Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Beaglee 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Beaglee that you should be aware of before investing. 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.