i-mobileLtd (TSE:6535) Is Paying Out A Larger Dividend Than Last Year

i-mobile Co.,Ltd. (TSE:6535) has announced that it will be increasing its dividend from last year's comparable payment on the 8th of October to ¥26.00. This will take the annual payment to 3.9% of the stock price, which is above what most companies in the industry pay.

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i-mobileLtd's Future Dividend Projections Appear Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last dividend was quite easily covered by i-mobileLtd's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS could expand by 27.3% if recent trends continue. If the dividend continues on this path, the payout ratio could be 52% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for i-mobileLtd

i-mobileLtd Is Still Building Its Track Record

i-mobileLtd's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 5 years was ¥8.33 in 2020, and the most recent fiscal year payment was ¥26.00. This works out to be a compound annual growth rate (CAGR) of approximately 26% a year over that time. i-mobileLtd has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. i-mobileLtd has seen EPS rising for the last five years, at 27% per annum. i-mobileLtd is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

We Really Like i-mobileLtd's Dividend

Overall, a dividend increase is always good, and we think that i-mobileLtd 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 of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. See if management have their own wealth at stake, by checking insider shareholdings in i-mobileLtd stock. 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.