Stock Analysis

R&D ComputerLtd (TSE:3924) Is Increasing Its Dividend To ¥19.00

TSE:3924
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R&D Computer Co.,Ltd.'s (TSE:3924) dividend will be increasing from last year's payment of the same period to ¥19.00 on 1st of December. This makes the dividend yield 5.0%, which is above the industry average.

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R&D ComputerLtd's Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, R&D ComputerLtd's dividend was only 56% of earnings, however it was paying out 95% of free cash flows. While the company may be more focused on returning cash to shareholders than growing the business at this time, we think that a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.

Over the next year, EPS could expand by 10.3% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 59% by next year, which is in a pretty sustainable range.

historic-dividend
TSE:3924 Historic Dividend July 9th 2025

View our latest analysis for R&D ComputerLtd

R&D ComputerLtd Doesn't Have A Long Payment History

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2021, the dividend has gone from ¥10.00 total annually to ¥38.00. This implies that the company grew its distributions at a yearly rate of about 40% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. R&D ComputerLtd has seen EPS rising for the last five years, at 10% per annum. The company is paying out a lot of its cash as a dividend, but it looks okay based on the payout ratio.

In Summary

Overall, we always like to see the dividend being raised, but we don't think R&D ComputerLtd will make a great income stock. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We would be a touch cautious of relying on this stock primarily for the dividend income.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 3 warning signs for R&D ComputerLtd (1 makes us a bit uncomfortable!) that you should be aware of before investing. Is R&D ComputerLtd 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.

About TSE:3924

R&D ComputerLtd

Provides system integration, infrastructure, package, cloud, and embedded control system solutions in Japan.

Flawless balance sheet second-rate dividend payer.

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