Sakai Moving ServiceLtd (TSE:9039) Is Due To Pay A Dividend Of ¥30.00

The board of Sakai Moving Service Co.,Ltd. (TSE:9039) has announced that it will pay a dividend on the 3rd of December, with investors receiving ¥30.00 per share. This takes the dividend yield to 3.7%, which shareholders will be pleased with.

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

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Sakai Moving ServiceLtd was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 5.5%. Assuming the dividend continues along recent trends, we think the payout ratio could be 57% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Sakai Moving ServiceLtd

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 annual payment back then was ¥17.50, compared to the most recent full-year payment of ¥98.00. This means that it has been growing its distributions at 19% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend's Growth Prospects Are Limited

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. Sakai Moving ServiceLtd hasn't seen much change in its earnings per share over the last five years.

Our Thoughts On Sakai Moving ServiceLtd's Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

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. Now, if you want to look closer, it would be worth checking out our free research on Sakai Moving ServiceLtd management tenure, salary, and performance. Is Sakai Moving ServiceLtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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