AiphoneLtd (TSE:6718) Is Paying Out A Dividend Of ¥80.00

Aiphone Co.,Ltd.'s (TSE:6718) investors are due to receive a payment of ¥80.00 per share on 30th of June. This makes the dividend yield 4.6%, which will augment investor returns quite nicely.

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AiphoneLtd's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before this announcement, AiphoneLtd was paying out 77% of earnings, but a comparatively small 62% of free cash flows. This leaves plenty of cash for reinvestment into the business.

Over the next year, EPS is forecast to expand by 14.6%. If the dividend continues along recent trends, we estimate the payout ratio could reach 78%, which is on the higher side, but certainly still feasible.

Check out our latest analysis for AiphoneLtd

AiphoneLtd 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. The annual payment during the last 10 years was ¥30.00 in 2015, and the most recent fiscal year payment was ¥130.00. This means that it has been growing its distributions at 16% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Dividend Growth Could Be Constrained

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. AiphoneLtd has seen EPS rising for the last five years, at 10% per annum. Past earnings growth has been decent, but unless this is one of those rare businesses that can grow without additional capital investment or marketing spend, we'd generally expect the higher payout ratio to limit its future growth prospects.

Our Thoughts On AiphoneLtd's Dividend

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. With a reasonable track record and good earnings coverage, the payments look sustainable. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 AiphoneLtd stock. Is AiphoneLtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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