Business Brain Showa-Ota (TSE:9658) Will Pay A Dividend Of ¥37.00

Business Brain Showa-Ota Inc.'s (TSE:9658) investors are due to receive a payment of ¥37.00 per share on 2nd of December. This will take the annual payment to 4.1% of the stock price, which is above what most companies in the industry pay.

See our latest analysis for Business Brain Showa-Ota

Business Brain Showa-Ota's Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. The last dividend was quite easily covered by Business Brain Showa-Ota's earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 8.4% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 58%, which is in the range that makes us comfortable with the sustainability of the dividend.

Business Brain Showa-Ota Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the dividend has gone from ¥9.00 total annually to ¥78.00. This means that it has been growing its distributions at 24% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

We Could See Business Brain Showa-Ota's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Business Brain Showa-Ota has seen EPS rising for the last five years, at 8.4% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

Business Brain Showa-Ota 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. 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Business Brain Showa-Ota that investors need to be conscious of moving forward. 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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