ASKUL's (TSE:2678) Dividend Will Be ¥19.00

The board of ASKUL Corporation (TSE:2678) has announced that it will pay a dividend of ¥19.00 per share on the 12th of August. This makes the dividend yield 2.3%, which is above the industry average.

View our latest analysis for ASKUL

ASKUL's Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, ASKUL's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

EPS is set to fall by 5.6% over the next 12 months. Assuming the dividend continues along recent trends, we believe the payout ratio could be 23%, which we are pretty comfortable with and we think is feasible on an earnings basis.

ASKUL Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was ¥15.00, compared to the most recent full-year payment of ¥38.00. This means that it has been growing its distributions at 9.7% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that ASKUL has grown earnings per share at 53% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

ASKUL Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that ASKUL is a strong income stock thanks to its track record and growing earnings. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for ASKUL that investors should take into consideration. 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.