Interested In NISSHIN GROUP HOLDINGS Company's (TSE:8881) Upcoming JP¥23.00 Dividend? You Have Three Days Left

Readers hoping to buy NISSHIN GROUP HOLDINGS Company, Limited (TSE:8881) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase NISSHIN GROUP HOLDINGS Company's shares before the 28th of March in order to receive the dividend, which the company will pay on the 27th of June.

The company's next dividend payment will be JP¥23.00 per share, and in the last 12 months, the company paid a total of JP¥23.00 per share. Based on the last year's worth of payments, NISSHIN GROUP HOLDINGS Company stock has a trailing yield of around 4.2% on the current share price of JP¥549.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately NISSHIN GROUP HOLDINGS Company's payout ratio is modest, at just 37% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Thankfully its dividend payments took up just 38% of the free cash flow it generated, which is a comfortable payout ratio.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Check out our latest analysis for NISSHIN GROUP HOLDINGS Company

Click here to see how much of its profit NISSHIN GROUP HOLDINGS Company paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by NISSHIN GROUP HOLDINGS Company's 6.8% per annum decline in earnings in the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, NISSHIN GROUP HOLDINGS Company has increased its dividend at approximately 14% a year on average.

Final Takeaway

Should investors buy NISSHIN GROUP HOLDINGS Company for the upcoming dividend? NISSHIN GROUP HOLDINGS Company has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. All things considered, we are not particularly enthused about NISSHIN GROUP HOLDINGS Company from a dividend perspective.

While it's tempting to invest in NISSHIN GROUP HOLDINGS Company for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 2 warning signs for NISSHIN GROUP HOLDINGS Company that we strongly recommend you have a look at before investing in the company.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.