Nomura Research Institute (TSE:4307) Is Paying Out A Larger Dividend Than Last Year

Nomura Research Institute, Ltd. (TSE:4307) will increase its dividend from last year's comparable payment on the 3rd of June to ¥29.00. The payment will take the dividend yield to 1.4%, which is in line with the average for the industry.

See our latest analysis for Nomura Research Institute

Nomura Research Institute's Dividend Is Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Before making this announcement, Nomura Research Institute was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 37.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 30% by next year, which is in a pretty sustainable range.

Nomura Research Institute Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was ¥14.33, compared to the most recent full-year payment of ¥58.00. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Nomura Research Institute has grown earnings per share at 15% per year over the past five years. Nomura Research Institute definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Nomura Research Institute Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Nomura Research Institute 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.

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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 12 analysts we track are forecasting for Nomura Research Institute for free with public analyst estimates for the company. Is Nomura Research Institute 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.