Zeria Pharmaceutical (TSE:4559) Has Announced A Dividend Of ¥22.00

The board of Zeria Pharmaceutical Co., Ltd. (TSE:4559) has announced that it will pay a dividend on the 1st of July, with investors receiving ¥22.00 per share. This means the dividend yield will be fairly typical at 2.0%.

View our latest analysis for Zeria Pharmaceutical

Zeria Pharmaceutical's Dividend Is Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Before making this announcement, Zeria Pharmaceutical was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 6.3%. If the dividend continues on this path, the payout ratio could be 22% by next year, which we think can be pretty sustainable going forward.

Zeria Pharmaceutical Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from ¥25.45 total annually to ¥44.00. This implies that the company grew its distributions at a yearly rate of about 5.6% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Zeria Pharmaceutical has been growing its earnings per share at 26% a 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.

We Really Like Zeria Pharmaceutical's Dividend

Overall, we like to see the dividend staying consistent, and we think Zeria Pharmaceutical might even raise payments in the future. 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. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Zeria Pharmaceutical stock. Is Zeria Pharmaceutical not quite the opportunity you were looking for? Why not check out our selection of top 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.