Macbee Planet (TSE:7095) Will Pay A Larger Dividend Than Last Year At ¥55.00

The board of Macbee Planet, Inc. (TSE:7095) has announced that it will be paying its dividend of ¥55.00 on the 31st of July, an increased payment from last year's comparable dividend. This makes the dividend yield 3.7%, which is above the industry average.

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Macbee Planet's Projected Earnings Seem Likely To Cover Future Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, prior to this announcement, Macbee Planet's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 18.9%. If the dividend continues on this path, the payout ratio could be 26% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Macbee Planet

Macbee Planet Doesn't Have A Long Payment History

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 2023, the dividend has gone from ¥28.00 total annually to ¥55.00. This works out to be a compound annual growth rate (CAGR) of approximately 40% a year over that time. Macbee Planet 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

The company's investors will be pleased to have been receiving dividend income for some time. Macbee Planet has impressed us by growing EPS at 32% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Macbee Planet Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Macbee Planet that investors should know about before committing capital to this stock. Is Macbee Planet not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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