Aoyama Zaisan Networks CompanyLimited (TSE:8929) Will Pay A Larger Dividend Than Last Year At ¥28.00

Aoyama Zaisan Networks Company,Limited's (TSE:8929) dividend will be increasing from last year's payment of the same period to ¥28.00 on 31st of March. Based on this payment, the dividend yield for the company will be 2.6%, which is fairly typical for the industry.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Aoyama Zaisan Networks CompanyLimited's stock price has increased by 38% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

View our latest analysis for Aoyama Zaisan Networks CompanyLimited

Aoyama Zaisan Networks CompanyLimited's Payment Could Potentially Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Aoyama Zaisan Networks CompanyLimited's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 11.0% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 47%, which is in the range that makes us comfortable with the sustainability of the dividend.

Aoyama Zaisan Networks CompanyLimited Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from ¥5.00 total annually to ¥46.00. This works out to be a compound annual growth rate (CAGR) of approximately 25% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Aoyama Zaisan Networks CompanyLimited Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Aoyama Zaisan Networks CompanyLimited has impressed us by growing EPS at 7.4% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Aoyama Zaisan Networks CompanyLimited's prospects of growing its dividend payments in the future.

We Really Like Aoyama Zaisan Networks CompanyLimited's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 Aoyama Zaisan Networks CompanyLimited that investors need to be conscious of moving forward. 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.