Seiko Epson (TSE:6724) Has Announced A Dividend Of ¥37.00

Seiko Epson Corporation's (TSE:6724) investors are due to receive a payment of ¥37.00 per share on 2nd of December. Based on this payment, the dividend yield will be 2.8%, which is fairly typical for the industry.

View our latest analysis for Seiko Epson

Seiko Epson's Payment Could Potentially Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. Prior to this announcement, Seiko Epson's dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 12.8%. Assuming the dividend continues along recent trends, we think the payout ratio could be 44% by next year, which is in a pretty sustainable range.

Seiko Epson Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from ¥25.00 total annually to ¥74.00. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. 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.

Seiko Epson Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Seiko Epson has seen EPS rising for the last five years, at 5.3% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like Seiko Epson's Dividend

Overall, we like to see the dividend staying consistent, and we think Seiko Epson might even raise payments in the future. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 8 Seiko Epson analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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