Computer Engineering & Consulting (TSE:9692) Is Due To Pay A Dividend Of ¥30.00

Computer Engineering & Consulting Ltd.'s (TSE:9692) investors are due to receive a payment of ¥30.00 per share on 30th of September. This will take the annual payment to 3.0% of the stock price, which is above what most companies in the industry pay.

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Computer Engineering & Consulting's Payment Could Potentially Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last dividend was quite easily covered by Computer Engineering & Consulting's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS is forecast to expand by 17.2%. If the dividend continues on this path, the payout ratio could be 46% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Computer Engineering & Consulting

Computer Engineering & Consulting Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ¥10.00 in 2015, and the most recent fiscal year payment was ¥65.00. This means that it has been growing its distributions at 21% 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.

Dividend Growth May Be Hard To Achieve

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 4.5% per year. The company has been growing at a pretty soft 4.5% per annum, and is paying out quite a lot of its earnings to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.

We Really Like Computer Engineering & Consulting's Dividend

Overall, a dividend increase is always good, and we think that Computer Engineering & Consulting is a strong income stock thanks to its track record and growing earnings. 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 of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. See if management have their own wealth at stake, by checking insider shareholdings in Computer Engineering & Consulting stock. 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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