Ricoh Company (TSE:7752) Has Announced A Dividend Of ¥19.00

The board of Ricoh Company, Ltd. (TSE:7752) has announced that it will pay a dividend on the 23rd of June, with investors receiving ¥19.00 per share. This makes the dividend yield about the same as the industry average at 2.3%.

Check out our latest analysis for Ricoh Company

Ricoh Company's Future Dividend Projections Appear Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. Based on the last payment, Ricoh Company was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 21.3% over the next year. If the dividend continues on this path, the payout ratio could be 43% by next year, which we think can be pretty sustainable going forward.

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Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was ¥34.00 in 2015, and the most recent fiscal year payment was ¥38.00. This means that it has been growing its distributions at 1.1% per annum over that time. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

We Could See Ricoh Company's Dividend Growing

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Ricoh Company has impressed us by growing EPS at 5.7% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

In Summary

Overall, this is a reasonable dividend, and it being raised is an added bonus. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Ricoh Company that investors should take into consideration. Is Ricoh Company not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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