SOLXYZ's (TSE:4284) Upcoming Dividend Will Be Larger Than Last Year's

SOLXYZ Co., Ltd. (TSE:4284) has announced that it will be increasing its dividend from last year's comparable payment on the 30th of March to ¥13.00. This will take the annual payment to 2.8% of the stock price, which is above what most companies in the industry pay.

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SOLXYZ's Future Dividend Projections Appear Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, SOLXYZ's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 8.2% 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 37% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for SOLXYZ

SOLXYZ Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of ¥2.50 in 2015 to the most recent total annual payment of ¥13.00. This implies that the company grew its distributions at a yearly rate of about 18% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

We Could See SOLXYZ's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that SOLXYZ has grown earnings per share at 8.2% per year over the past five years. SOLXYZ definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

SOLXYZ Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 2 warning signs for SOLXYZ (1 doesn't sit too well with us!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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.