Aeon Kyushu Co., Ltd. (TSE:2653) Goes Ex-Dividend Soon

It looks like Aeon Kyushu Co., Ltd. (TSE:2653) is about to go ex-dividend in the next four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Aeon Kyushu's shares before the 27th of February in order to be eligible for the dividend, which will be paid on the 30th of April.

The company's next dividend payment will be JP¥25.00 per share, and in the last 12 months, the company paid a total of JP¥45.00 per share. Last year's total dividend payments show that Aeon Kyushu has a trailing yield of 1.7% on the current share price of JP¥2599.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Aeon Kyushu has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Aeon Kyushu

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Aeon Kyushu is paying out just 25% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. What's good is that dividends were well covered by free cash flow, with the company paying out 12% of its cash flow last year.

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.

Click here to see how much of its profit Aeon Kyushu paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Aeon Kyushu has delivered 27% dividend growth per year on average over the past two years.

To Sum It Up

From a dividend perspective, should investors buy or avoid Aeon Kyushu? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. All things considered, we are not particularly enthused about Aeon Kyushu from a dividend perspective.

So while Aeon Kyushu looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. In terms of investment risks, we've identified 3 warning signs with Aeon Kyushu and understanding them should be part of your investment process.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.