Stock Analysis

JCR Pharmaceuticals (TSE:4552) Has Announced A Dividend Of ¥10.00

TSE:4552
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JCR Pharmaceuticals Co., Ltd. (TSE:4552) will pay a dividend of ¥10.00 on the 27th of June. Based on this payment, the dividend yield will be 2.8%, which is fairly typical for the industry.

Check out our latest analysis for JCR Pharmaceuticals

JCR Pharmaceuticals' Distributions May Be Difficult To Sustain

We aren't too impressed by dividend yields unless they can be sustained over time. JCR Pharmaceuticals is unprofitable despite paying a dividend, and it is paying out 563% of its free cash flow. These payout levels would generally be quite difficult to keep up.

Over the next year, EPS is forecast to expand by 27.8%. While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability. Unless this can be done in short order, the dividend might be difficult to sustain.

historic-dividend
TSE:4552 Historic Dividend December 8th 2024

JCR Pharmaceuticals Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of ¥3.50 in 2014 to the most recent total annual payment of ¥20.00. This implies that the company grew its distributions at a yearly rate of about 19% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

JCR Pharmaceuticals May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. However, JCR Pharmaceuticals' EPS was effectively flat over the past five years, which could stop the company from paying more every year.

JCR Pharmaceuticals' Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about JCR Pharmaceuticals' payments, as there could be some issues with sustaining them into the future. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 2 warning signs for JCR Pharmaceuticals (of which 1 is significant!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.