Stock Analysis
- Japan
- /
- Electronic Equipment and Components
- /
- TSE:6744
Nohmi Bosai (TSE:6744) Is Due To Pay A Dividend Of ¥30.00
The board of Nohmi Bosai Ltd. (TSE:6744) has announced that it will pay a dividend on the 5th of December, with investors receiving ¥30.00 per share. This will take the dividend yield to an attractive 2.8%, providing a nice boost to shareholder returns.
See our latest analysis for Nohmi Bosai
Nohmi Bosai's Payment Has Solid Earnings Coverage
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Before making this announcement, Nohmi Bosai was paying a whopping 445% as a dividend, but this only made up 36% of its overall earnings. The business might be trying to strike a balance between returning cash to shareholders and reinvesting back into the business, but this high of a payout ratio could definitely force the dividend to be cut if the company runs into a bit of a tough spot.
The next year is set to see EPS grow by 1.6%. If the dividend continues along recent trends, we estimate the payout ratio will be 42%, which is in the range that makes us comfortable with the sustainability of the dividend.
Nohmi Bosai Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from ¥15.00 total annually to ¥60.00. This means that it has been growing its distributions at 15% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. Nohmi Bosai hasn't seen much change in its earnings per share over the last five years. While EPS growth is quite low, Nohmi Bosai has the option to increase the payout ratio to return more cash to shareholders.
In Summary
In summary, while it's always good to see the dividend being raised, we don't think Nohmi Bosai's payments are rock solid. While Nohmi Bosai is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Nohmi Bosai that investors should take into consideration. Is Nohmi Bosai not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
Valuation is complex, but we're here to simplify it.
Discover if Nohmi Bosai might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About TSE:6744
Nohmi Bosai
Engages in the development, marketing, installation, and maintenance of various fire protection systems in Japan, China, rest of Asia, and the United States.