Sakai Moving ServiceLtd (TSE:9039) Has Announced That It Will Be Increasing Its Dividend To ¥59.00

Sakai Moving Service Co.,Ltd. (TSE:9039) will increase its dividend from last year's comparable payment on the 17th of June to ¥59.00. This will take the dividend yield to an attractive 3.1%, providing a nice boost to shareholder returns.

View our latest analysis for Sakai Moving ServiceLtd

Sakai Moving ServiceLtd's Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Before making this announcement, Sakai Moving ServiceLtd was easily earning enough to cover the dividend. 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 11.7% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 38% by next year, which is in a pretty sustainable range.

Sakai Moving ServiceLtd Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the dividend has gone from ¥17.50 total annually to ¥74.00. This means that it has been growing its distributions at 16% per annum 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.

Sakai Moving ServiceLtd May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. However, Sakai Moving ServiceLtd's EPS was effectively flat over the past five years, which could stop the company from paying more every year. While growth may be thin on the ground, Sakai Moving ServiceLtd could always pay out a higher proportion of earnings to increase shareholder returns.

Sakai Moving ServiceLtd Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Sakai Moving ServiceLtd 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Sakai Moving ServiceLtd for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated 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.