Atrae (TSE:6194) Has Announced That It Will Be Increasing Its Dividend To ¥31.00

Atrae, Inc. (TSE:6194) will increase its dividend from last year's comparable payment on the 2nd of December to ¥31.00. This will take the annual payment to 3.6% of the stock price, which is above what most companies in the industry pay.

We've discovered 1 warning sign about Atrae. View them for free.

Atrae's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last payment made up 72% of earnings, but cash flows were much higher. This leaves plenty of cash for reinvestment into the business.

EPS is set to grow by 19.4% over the next year. If recent patterns in the dividend continues, the payout ratio in 12 months could be 84% which is a bit high but can definitely be sustainable.

See our latest analysis for Atrae

Atrae Doesn't Have A Long Payment History

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Atrae has seen EPS rising for the last five years, at 5.1% per annum. The payout ratio is very much on the higher end, which could mean that the growth rate will slow down in the future, and that could flow through to the dividend as well.

In Summary

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Atrae that you should be aware of before investing. Is Atrae not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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