Soliton Systems K.K (TSE:3040) Has Announced A Dividend Of ¥26.00

The board of Soliton Systems K.K. (TSE:3040) has announced that it will pay a dividend on the 20th of August, with investors receiving ¥26.00 per share. This will take the annual payment to 4.2% of the stock price, which is above what most companies in the industry pay.

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Soliton Systems K.K's Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Prior to this announcement, Soliton Systems K.K's dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 21.7% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 65% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Soliton Systems K.K

Soliton Systems K.K 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 ¥7.50, compared to the most recent full-year payment of ¥52.00. This means that it has been growing its distributions at 21% 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.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Soliton Systems K.K has impressed us by growing EPS at 22% per year over the past five years. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

Soliton Systems K.K Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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.

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. Now, if you want to look closer, it would be worth checking out our free research on Soliton Systems K.K management tenure, salary, and performance. Is Soliton Systems K.K not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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