GOLDCRESTLtd (TSE:8871) Has Announced A Dividend Of ¥50.00

GOLDCREST Co.,Ltd. (TSE:8871) will pay a dividend of ¥50.00 on the 8th of December. This takes the dividend yield to 3.0%, which shareholders will be pleased with.

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GOLDCRESTLtd's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. Prior to this announcement, GOLDCRESTLtd's earnings easily covered the dividend, but free cash flows were negative. Since a dividend means the company is paying out cash to investors, this could prove to be a problem in the future.

EPS is set to fall by 0.6% over the next 12 months. Assuming the dividend continues along recent trends, we believe the payout ratio could be 63%, which we are pretty comfortable with and we think is feasible on an earnings basis.

View our latest analysis for GOLDCRESTLtd

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was ¥40.00 in 2015, and the most recent fiscal year payment was ¥100.00. This works out to be a compound annual growth rate (CAGR) of approximately 9.6% a year over that time. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. GOLDCRESTLtd has seen EPS rising for the last five years, at 23% per annum. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that GOLDCRESTLtd could prove to be a strong dividend payer.

Our Thoughts On GOLDCRESTLtd's Dividend

Overall, we always like to see the dividend being raised, but we don't think GOLDCRESTLtd will make a great income stock. While GOLDCRESTLtd is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for GOLDCRESTLtd that investors need to be conscious of moving forward. Is GOLDCRESTLtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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