Hamamatsu Photonics K.K (TSE:6965) Has Announced A Dividend Of ¥38.00

Hamamatsu Photonics K.K. (TSE:6965) will pay a dividend of ¥38.00 on the 25th of December. This makes the dividend yield 1.7%, which will augment investor returns quite nicely.

View our latest analysis for Hamamatsu Photonics K.K

Hamamatsu Photonics K.K's Payment Has Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, based ont he last payment, Hamamatsu Photonics K.K was earning enough to cover the dividend pretty comfortably. The business is earning enough to make the dividend feasible, but the cash payout ratio of 94% shows that most of the cash is going back to the shareholders, which could constrain growth prospects going forward.

The next year is set to see EPS grow by 2.4%. If the dividend continues on this path, the payout ratio could be 35% by next year, which we think can be pretty sustainable going forward.

Hamamatsu Photonics K.K Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was ¥23.00 in 2014, and the most recent fiscal year payment was ¥76.00. This means that it has been growing its distributions at 13% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Hamamatsu Photonics K.K has seen EPS rising for the last five years, at 11% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Our Thoughts On Hamamatsu Photonics K.K's Dividend

Overall, a consistent dividend is a good thing, and we think that Hamamatsu Photonics K.K has the ability to continue this into the future. The payments look okay by most measures, the lack of cash flow could definitely cause problems for them in the future. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Hamamatsu Photonics K.K that investors should take into consideration. Is Hamamatsu Photonics K.K not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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