JINS HOLDINGS (TSE:3046) Is Due To Pay A Dividend Of ¥23.00

JINS HOLDINGS Inc. (TSE:3046) has announced that it will pay a dividend of ¥23.00 per share on the 12th of May. Despite this raise, the dividend yield of 1.0% is only a modest boost to shareholder returns.

View our latest analysis for JINS HOLDINGS

JINS HOLDINGS' Future Dividend Projections Appear Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. However, JINS HOLDINGS' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 14.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 30%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was ¥32.00 in 2015, and the most recent fiscal year payment was ¥67.00. This implies that the company grew its distributions at a yearly rate of about 7.7% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

JINS HOLDINGS May Find It Hard To Grow The Dividend

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Earnings have grown at around 4.4% a year for the past five years, which isn't massive but still better than seeing them shrink. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.

Our Thoughts On JINS HOLDINGS' Dividend

Overall, this is a reasonable dividend, and it being raised is an added bonus. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for JINS HOLDINGS that investors need to be conscious of moving forward. Is JINS HOLDINGS not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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