Stock Analysis

Kyowa Kirin's (TSE:4151) Dividend Will Be ¥29.00

TSE:4151
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The board of Kyowa Kirin Co., Ltd. (TSE:4151) has announced that it will pay a dividend on the 2nd of September, with investors receiving ¥29.00 per share. This makes the dividend yield about the same as the industry average at 2.2%.

Check out our latest analysis for Kyowa Kirin

Kyowa Kirin's Earnings Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. However, prior to this announcement, Kyowa Kirin'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 is forecast to rise by 2.6% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 40%, which is in the range that makes us comfortable with the sustainability of the dividend.

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TSE:4151 Historic Dividend April 11th 2024

Kyowa Kirin Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was ¥25.00 in 2014, and the most recent fiscal year payment was ¥58.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.8% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. Kyowa Kirin has impressed us by growing EPS at 8.8% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Kyowa Kirin's prospects of growing its dividend payments in the future.

Kyowa Kirin 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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Kyowa Kirin that investors need to be conscious of moving forward. 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.

About TSE:4151

Kyowa Kirin

Engages in the research, development, manufacturing, marketing, and import/export of pharmaceuticals for oncology, nephrology, central nervous system, and immunology therapeutic areas in Japan, the United States, rest of the Americas, Europe, Asia, and internationally.

Flawless balance sheet with solid track record and pays a dividend.