GSI Creos (TSE:8101) Is Increasing Its Dividend To ¥100.00

GSI Creos Corporation (TSE:8101) will increase its dividend from last year's comparable payment on the 29th of June to ¥100.00. This will take the annual payment to 4.3% of the stock price, which is above what most companies in the industry pay.

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GSI Creos' Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last dividend was quite easily covered by GSI Creos' earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

If the trend of the last few years continues, EPS will grow by 9.5% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 56%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for GSI Creos

GSI Creos Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the annual payment back then was ¥10.00, compared to the most recent full-year payment of ¥100.00. This means that it has been growing its distributions at 26% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

GSI Creos Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. GSI Creos has seen EPS rising for the last five years, at 9.5% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like GSI Creos' Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in GSI Creos in our latest insider ownership analysis. If you are a dividend investor, you might also want to look at our curated list of high yield 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.