It Might Not Be A Great Idea To Buy MEDIA DO Co., Ltd. (TSE:3678) For Its Next Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see MEDIA DO Co., Ltd. (TSE:3678) is about to trade ex-dividend in the next three days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase MEDIA DO's shares before the 27th of February in order to receive the dividend, which the company will pay on the 8th of May.

The company's next dividend payment will be JP¥35.00 per share, on the back of last year when the company paid a total of JP¥27.00 to shareholders. Last year's total dividend payments show that MEDIA DO has a trailing yield of 1.6% on the current share price of JP¥1653.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether MEDIA DO can afford its dividend, and if the dividend could grow.

See our latest analysis for MEDIA DO

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. MEDIA DO reported a loss last year, so it's not great to see that it has continued paying a dividend.

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

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. MEDIA DO was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. MEDIA DO has delivered 15% dividend growth per year on average over the past eight years.

We update our analysis on MEDIA DO every 24 hours, so you can always get the latest insights on its financial health, here.

The Bottom Line

Is MEDIA DO worth buying for its dividend? MEDIA DO doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.

Ever wonder what the future holds for MEDIA DO? See what the two analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

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.