Beaglee's (TSE:3981) Dividend Will Be Increased To ¥17.00

The board of Beaglee Inc. (TSE:3981) has announced that the dividend on 31st of March will be increased to ¥17.00, which will be 13% higher than last year's payment of ¥15.00 which covered the same period. Although the dividend is now higher, the yield is only 1.0%, which is below the industry average.

Check out our latest analysis for Beaglee

Beaglee's Projected Earnings Seem Likely To Cover Future Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. However, Beaglee's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share could rise by 7.6% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 13%, which is in the range that makes us comfortable with the sustainability of the dividend.

Beaglee Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2021, the annual payment back then was ¥12.00, compared to the most recent full-year payment of ¥15.00. This works out to be a compound annual growth rate (CAGR) of approximately 7.7% a year over that time. Beaglee has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

Beaglee Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Beaglee has impressed us by growing EPS at 7.6% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

In Summary

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Beaglee that investors should take into consideration. 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.