Income Investors Should Know That Aoyama Zaisan Networks Company,Limited (TSE:8929) Goes Ex-Dividend Soon

It looks like Aoyama Zaisan Networks Company,Limited (TSE:8929) is about to go ex-dividend in the next four days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Meaning, you will need to purchase Aoyama Zaisan Networks CompanyLimited's shares before the 27th of June to receive the dividend, which will be paid on the 26th of August.

The company's upcoming dividend is JP¥20.00 a share, following on from the last 12 months, when the company distributed a total of JP¥51.00 per share to shareholders. Looking at the last 12 months of distributions, Aoyama Zaisan Networks CompanyLimited has a trailing yield of approximately 2.8% on its current stock price of JP¥1840.00. If you buy this business for its dividend, you should have an idea of whether Aoyama Zaisan Networks CompanyLimited's dividend is reliable and sustainable. So we need to investigate whether Aoyama Zaisan Networks CompanyLimited can afford its dividend, and if the dividend could grow.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Aoyama Zaisan Networks CompanyLimited paid out more than half (50%) of its earnings last year, which is a regular payout ratio for most companies. A useful secondary check can be to evaluate whether Aoyama Zaisan Networks CompanyLimited generated enough free cash flow to afford its dividend. The good news is it paid out just 16% of its free cash flow in the last year.

It's positive to see that Aoyama Zaisan Networks CompanyLimited's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Check out our latest analysis for Aoyama Zaisan Networks CompanyLimited

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Aoyama Zaisan Networks CompanyLimited, with earnings per share up 5.8% on average over the last five years. Decent historical earnings per share growth suggests Aoyama Zaisan Networks CompanyLimited has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. Therefore it's unlikely that the company will be able to reinvest heavily in its business, which could presage slower growth in the future.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Aoyama Zaisan Networks CompanyLimited has lifted its dividend by approximately 26% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

The Bottom Line

Should investors buy Aoyama Zaisan Networks CompanyLimited for the upcoming dividend? While earnings per share growth has been modest, Aoyama Zaisan Networks CompanyLimited's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. To summarise, Aoyama Zaisan Networks CompanyLimited looks okay on this analysis, although it doesn't appear a stand-out opportunity.

Curious what other investors think of Aoyama Zaisan Networks CompanyLimited? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

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.