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

The board of E-Guardian Inc. (TSE:6050) has announced that it will be paying its dividend of ¥35.00 on the 19th of December, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 1.6%.

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E-Guardian's Payment Could Potentially Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. However, E-Guardian's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 5.1% 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.

View our latest analysis for E-Guardian

E-Guardian Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥2.00 in 2015 to the most recent total annual payment of ¥35.00. This implies that the company grew its distributions at a yearly rate of about 33% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

E-Guardian May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings per share has been crawling upwards at 4.0% per year. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.

E-Guardian Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. See if management have their own wealth at stake, by checking insider shareholdings in E-Guardian stock. Is E-Guardian 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.