Japan Property Management CenterLtd's (TSE:3276) Dividend Will Be Increased To ¥27.50

Japan Property Management Center Co.,Ltd.'s (TSE:3276) dividend will be increasing from last year's payment of the same period to ¥27.50 on 9th of September. This makes the dividend yield 4.2%, which is above the industry average.

View our latest analysis for Japan Property Management CenterLtd

Japan Property Management CenterLtd's Dividend Is Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last dividend was quite comfortably covered by Japan Property Management CenterLtd's earnings, but it was a bit tighter on the cash flow front. By paying out so much of its cash flows, this could indicate that the company has limited opportunities for investment and growth.

The next year is set to see EPS grow by 29.0%. If the dividend continues on this path, the payout ratio could be 44% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of ¥12.50 in 2014 to the most recent total annual payment of ¥55.00. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend's Growth Prospects Are Limited

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Unfortunately, Japan Property Management CenterLtd's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.

Our Thoughts On Japan Property Management CenterLtd's Dividend

Overall, we always like to see the dividend being raised, but we don't think Japan Property Management CenterLtd will make a great income stock. While Japan Property Management CenterLtd is earning enough to cover the dividend, we are generally unimpressed with its future prospects. This company is not in the top tier of income providing stocks.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 2 warning signs for Japan Property Management CenterLtd you should be aware of, and 1 of them is concerning. 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.