Edia Co., Ltd. (TSE:3935) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Edia Co., Ltd. (TSE:3935) stock is about to trade ex-dividend in four days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase Edia's shares before the 27th of February in order to be eligible for the dividend, which will be paid on the 23rd of May.

The company's next dividend payment will be JP¥7.00 per share, and in the last 12 months, the company paid a total of JP¥5.00 per share. Calculating the last year's worth of payments shows that Edia has a trailing yield of 1.1% on the current share price of JP¥465.00. If you buy this business for its dividend, you should have an idea of whether Edia's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Edia

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Edia is paying out just 14% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

Click here to see how much of its profit Edia paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Edia has grown its earnings rapidly, up 66% a year for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, Edia looks like a promising growth company.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. It looks like the Edia dividends are largely the same as they were two years ago.

Final Takeaway

Should investors buy Edia for the upcoming dividend? Companies like Edia that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, Edia looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while Edia looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 2 warning signs for Edia that you should be aware of before investing in their shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.