IX Knowledge's (TSE:9753) Shareholders Will Receive A Bigger Dividend Than Last Year

IX Knowledge Incorporated's (TSE:9753) dividend will be increasing from last year's payment of the same period to ¥40.00 on 30th of June. This will take the dividend yield to an attractive 3.2%, providing a nice boost to shareholder returns.

IX Knowledge's Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, IX Knowledge's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 6.3% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 25% by next year, which is in a pretty sustainable range.

See our latest analysis for IX Knowledge

IX Knowledge Doesn't Have A Long Payment History

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

IX Knowledge Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that IX Knowledge has been growing its earnings per share at 6.3% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for IX Knowledge's prospects of growing its dividend payments in the future.

In Summary

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

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. For instance, we've picked out 2 warning signs for IX Knowledge that investors should take into consideration. Is IX Knowledge 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.