Startia HoldingsInc (TSE:3393) Has Announced A Dividend Of ¥54.00

Startia Holdings,Inc. (TSE:3393) has announced that it will pay a dividend of ¥54.00 per share on the 9th of December. This will take the dividend yield to an attractive 4.4%, providing a nice boost to shareholder returns.

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Startia HoldingsInc's 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. Startia HoldingsInc was earning enough to cover the previous dividend, but it was paying out quite a large proportion of its free cash flows. By paying out so much of its cash flows, this could indicate that the company has limited opportunities for investment and growth.

If the trend of the last few years continues, EPS will grow by 67.4% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 46%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Startia HoldingsInc

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from an annual total of ¥7.83 in 2015 to the most recent total annual payment of ¥117.00. This implies that the company grew its distributions at a yearly rate of about 31% over that duration. Startia HoldingsInc has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Startia HoldingsInc has seen EPS rising for the last five years, at 67% per annum. Startia HoldingsInc is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

Our Thoughts On Startia HoldingsInc's Dividend

In summary, while it's always good to see the dividend being raised, we don't think Startia HoldingsInc's payments are rock solid. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. We don't think Startia HoldingsInc is a great stock to add to your portfolio if income is your focus.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Startia HoldingsInc that investors should take into consideration. Is Startia HoldingsInc not quite the opportunity you were looking for? Why not check out our selection of top 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.