E-Guardian (TSE:6050) Will Pay A Larger Dividend Than Last Year At ¥35.00

E-Guardian Inc. (TSE:6050) has announced that it will be increasing its dividend from last year's comparable payment on the 19th of December to ¥35.00. This takes the dividend yield to 1.8%, which shareholders will be pleased with.

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E-Guardian's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, prior to this announcement, E-Guardian's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 5.3% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 43% by next year, which is in a pretty sustainable range.

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E-Guardian Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was ¥2.00, compared to the most recent full-year payment of ¥35.00. This means that it has been growing its distributions at 33% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Dividend Growth May Be Hard To Achieve

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, E-Guardian has only grown its earnings per share at 4.1% per annum over the past five years. If E-Guardian is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

E-Guardian 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on E-Guardian management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of 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.