SIIX (TSE:7613) Has Announced A Dividend Of ¥24.00

SIIX Corporation (TSE:7613) will pay a dividend of ¥24.00 on the 2nd of September. This makes the dividend yield 2.0%, which is above the industry average.

Check out our latest analysis for SIIX

SIIX's Payment Has Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, prior to this announcement, SIIX's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 22.4% over the next year. If the dividend continues on this path, the payout ratio could be 26% by next year, which we think can be pretty sustainable going forward.

SIIX 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. Since 2014, the dividend has gone from ¥16.00 total annually to ¥32.00. This means that it has been growing its distributions at 7.2% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

We Could See SIIX's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. SIIX has seen EPS rising for the last five years, at 5.8% per annum. SIIX definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like SIIX's Dividend

Overall, a dividend increase is always good, and we think that SIIX is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income 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. Taking the debate a bit further, we've identified 1 warning sign for SIIX that investors need to be conscious of moving forward. Is SIIX not quite the opportunity you were looking for? Why not check out our selection of top 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.