Robot Home (TSE:1435) Has Announced A Dividend Of ¥1.00

Robot Home, Inc. (TSE:1435) has announced that it will pay a dividend of ¥1.00 per share on the 4th of September. The dividend yield is 1.3% based on this payment, which is a little bit low compared to the other companies in the industry.

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Robot Home's Payment Could Potentially Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Before making this announcement, Robot Home was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 86.5% if recent trends continue. If the dividend continues on this path, the payout ratio could be 8.3% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Robot Home

Robot Home's Dividend Has Lacked Consistency

It's comforting to see that Robot Home has been paying a dividend for a number of years now, however it has been cut at least once in that time. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The dividend has gone from an annual total of ¥2.40 in 2016 to the most recent total annual payment of ¥2.00. This works out to be a decline of approximately 2.0% per year over that time. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Robot Home has seen EPS rising for the last five years, at 87% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like Robot Home's Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 3 warning signs for Robot Home (1 is significant!) that you should be aware of before investing. Is Robot Home 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.