The board of PAL GROUP Holdings CO., LTD. (TSE:2726) has announced that it will pay a dividend of ¥50.00 per share on the 30th of May. This means the dividend yield will be fairly typical at 1.7%.
View our latest analysis for PAL GROUP Holdings
PAL GROUP Holdings' Payment Could Potentially Have Solid Earnings Coverage
Unless the payments are sustainable, the dividend yield doesn't mean too much. Based on the last payment, PAL GROUP Holdings was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.
Over the next year, EPS is forecast to expand by 18.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 30% by next year, which is in a pretty sustainable range.
PAL GROUP Holdings Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥12.50 total annually to ¥50.00. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. 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.
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. It's encouraging to see that PAL GROUP Holdings has been growing its earnings per share at 18% a year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
We Really Like PAL GROUP Holdings' Dividend
Overall, we like to see the dividend staying consistent, and we think PAL GROUP Holdings might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for PAL GROUP Holdings that investors need to be conscious of moving forward. Is PAL GROUP Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
About TSE:2726
PAL GROUP Holdings
Engages in the planning, manufacture, wholesale, and retail of clothing products, including men’s and women’s clothing and accessories in Japan.
Flawless balance sheet with solid track record and pays a dividend.
