Sun-Wa Technos (TSE:8137) Will Pay A Dividend Of ¥60.00

Sun-Wa Technos Corporation (TSE:8137) has announced that it will pay a dividend of ¥60.00 per share on the 2nd of December. This makes the dividend yield 4.9%, which is above the industry average.

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Sun-Wa Technos' Payment Could Potentially Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. Prior to this announcement, Sun-Wa Technos' dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

Earnings per share could rise by 13.9% over the next year if things go the same way as they have for the last few years. If recent patterns in the dividend continue, the payout ratio in 12 months could be 82% which is a bit high but can definitely be sustainable.

Check out our latest analysis for Sun-Wa Technos

Sun-Wa Technos Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥24.00 total annually to ¥120.00. This works out to be a compound annual growth rate (CAGR) of approximately 17% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Sun-Wa Technos has seen EPS rising for the last five years, at 14% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

Sun-Wa Technos Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Sun-Wa Technos 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 of these factors considered, we think this has solid potential as a dividend stock.

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 example, we've picked out 1 warning sign for Sun-Wa Technos that investors should know about before committing capital to this stock. Is Sun-Wa Technos 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.