Three Days Left Until DAIWA TSUSHIN Co., Ltd (TSE:7116) Trades Ex-Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see DAIWA TSUSHIN Co., Ltd (TSE:7116) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, DAIWA TSUSHIN investors that purchase the stock on or after the 27th of September will not receive the dividend, which will be paid on the 1st of January.

The upcoming dividend for DAIWA TSUSHIN is JP¥5.00 per share. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether DAIWA TSUSHIN has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for DAIWA TSUSHIN

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. DAIWA TSUSHIN has a low and conservative payout ratio of just 10% of its income after tax.

Click here to see how much of its profit DAIWA TSUSHIN paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Readers will understand then, why we're concerned to see DAIWA TSUSHIN's earnings per share have dropped 29% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

This is DAIWA TSUSHIN's first year of paying a regular dividend, which is exciting for shareholders - but it does mean there's no dividend history to examine.

To Sum It Up

Has DAIWA TSUSHIN got what it takes to maintain its dividend payments? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. DAIWA TSUSHIN ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

While it's tempting to invest in DAIWA TSUSHIN for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 3 warning signs for DAIWA TSUSHIN (1 is a bit unpleasant!) that you ought to be aware of before buying the shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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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.