Internetworking and Broadband ConsultingLtd (TSE:3920) Will Pay A Dividend Of ¥6.00

The board of Internetworking and Broadband Consulting Co.,Ltd. (TSE:3920) has announced that it will pay a dividend on the 23rd of December, with investors receiving ¥6.00 per share. The payment will take the dividend yield to 1.3%, which is in line with the average for the industry.

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Internetworking and Broadband ConsultingLtd's Future Dividend Projections Appear Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Before making this announcement, Internetworking and Broadband ConsultingLtd was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 36.0% if recent trends continue. If the dividend continues on this path, the payout ratio could be 12% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Internetworking and Broadband ConsultingLtd

Internetworking and Broadband ConsultingLtd Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The dividend has gone from an annual total of ¥8.00 in 2023 to the most recent total annual payment of ¥12.00. This means that it has been growing its distributions at 22% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Internetworking and Broadband ConsultingLtd has impressed us by growing EPS at 36% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like Internetworking and Broadband ConsultingLtd's Dividend

Overall, a dividend increase is always good, and we think that Internetworking and Broadband ConsultingLtd 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Internetworking and Broadband ConsultingLtd (1 makes us a bit uncomfortable!) that you should be aware of before investing. Is Internetworking and Broadband ConsultingLtd 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.