The board of Vt Holdings Co.,Ltd. (TSE:7593) has announced that it will pay a dividend on the 11th of June, with investors receiving ¥12.00 per share. This means the annual payment is 4.8% of the current stock price, which is above the average for the industry.
Check out our latest analysis for Vt HoldingsLtd
Vt HoldingsLtd's Projected Earnings Seem Likely To Cover Future Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last dividend was quite easily covered by Vt HoldingsLtd's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.
The next year is set to see EPS grow by 9.8%. Assuming the dividend continues along recent trends, we think the payout ratio could be 42% by next year, which is in a pretty sustainable range.
Vt HoldingsLtd Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the annual payment back then was ¥10.67, compared to the most recent full-year payment of ¥24.00. This means that it has been growing its distributions at 8.4% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
Vt HoldingsLtd Could Grow Its Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Vt HoldingsLtd has seen EPS rising for the last five years, at 7.7% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
We Really Like Vt HoldingsLtd's Dividend
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. For instance, we've picked out 2 warning signs for Vt HoldingsLtd 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.
About TSE:7593
6 star dividend payer and undervalued.
