Fukui Computer HoldingsInc's (TSE:9790) Shareholders Will Receive A Bigger Dividend Than Last Year

Fukui Computer Holdings,Inc. (TSE:9790) will increase its dividend from last year's comparable payment on the 24th of June to ¥70.00. This will take the annual payment to 2.5% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for Fukui Computer HoldingsInc

Fukui Computer HoldingsInc's Payment Could Potentially Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Fukui Computer HoldingsInc'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 2.7% over the next year. If the dividend continues on this path, the payout ratio could be 41% by next year, which we think can be pretty sustainable going forward.

Fukui Computer HoldingsInc 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 ¥12.50 total annually to ¥70.00. This works out to be a compound annual growth rate (CAGR) of approximately 19% a year 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.

Fukui Computer HoldingsInc May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, Fukui Computer HoldingsInc has only grown its earnings per share at 3.2% per annum over the past five years. While EPS growth is quite low, Fukui Computer HoldingsInc has the option to increase the payout ratio to return more cash to shareholders.

We Really Like Fukui Computer HoldingsInc's Dividend

Overall, a dividend increase is always good, and we think that Fukui Computer HoldingsInc is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in Fukui Computer HoldingsInc in our latest insider ownership analysis. 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.