R&D ComputerLtd (TSE:3924) Will Pay A Dividend Of ¥19.00

R&D Computer Co.,Ltd.'s (TSE:3924) investors are due to receive a payment of ¥19.00 per share on 3rd of June. This will take the dividend yield to an attractive 4.2%, providing a nice boost to shareholder returns.

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R&D ComputerLtd'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. Before making this announcement, R&D ComputerLtd was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 12.1% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 69% by next year, which we think can be pretty sustainable going forward.

See 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. The dividend has gone from an annual total of ¥10.00 in 2021 to the most recent total annual payment of ¥38.00. This means that it has been growing its distributions at 40% 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that R&D ComputerLtd has been growing its earnings per share at 12% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like R&D ComputerLtd's Dividend

Overall, a dividend increase is always good, and we think that R&D ComputerLtd is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Are management backing themselves to deliver performance? Check their shareholdings in R&D ComputerLtd in our latest insider ownership analysis. 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.