GOLDCRESTLtd (TSE:8871) Will Pay A Dividend Of ¥50.00

GOLDCREST Co.,Ltd.'s (TSE:8871) investors are due to receive a payment of ¥50.00 per share on 8th of December. This will take the annual payment to 3.0% of the stock price, which is above what most companies in the industry pay.

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GOLDCRESTLtd's Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, GOLDCRESTLtd was earning enough to cover the dividend, but free cash flows weren't positive. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

Earnings per share is forecast to rise by 3.2% over the next year. If recent patterns in the dividend continues, the payout ratio in 12 months could be 76% which is a bit high but can definitely be sustainable.

See 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 implies that the company grew its distributions at a yearly rate of about 9.6% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

Dividend Growth Is Doubtful

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. It's not great to see that GOLDCRESTLtd's earnings per share has fallen at approximately 6.9% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.

GOLDCRESTLtd's Dividend Doesn't Look Sustainable

In summary, while it's always good to see the dividend being raised, we don't think GOLDCRESTLtd's payments are rock solid. While GOLDCRESTLtd is earning enough to cover the payments, the cash flows are lacking. This company is not in the top tier of income providing stocks.

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. 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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