NEC Networks & System Integration's (TSE:1973) Dividend Will Be Increased To ¥28.00

NEC Networks & System Integration Corporation's (TSE:1973) dividend will be increasing from last year's payment of the same period to ¥28.00 on 4th of December. This will take the annual payment to 2.3% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for NEC Networks & System Integration

NEC Networks & System Integration's Earnings Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. The last dividend was quite easily covered by NEC Networks & System Integration's earnings. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 12.3% over the next year. If the dividend continues on this path, the payout ratio could be 49% by next year, which we think can be pretty sustainable going forward.

NEC Networks & System Integration 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 2014, the dividend has gone from ¥20.00 total annually to ¥56.00. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that NEC Networks & System Integration has been growing its earnings per share at 12% a year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like NEC Networks & System Integration's Dividend

Overall, a dividend increase is always good, and we think that NEC Networks & System Integration is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for NEC Networks & System Integration for free with public analyst estimates for the company. Is NEC Networks & System Integration not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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