Kintetsu Group Holdings Co.,Ltd. (TSE:9041) Will Pay A JP¥25.00 Dividend In Three Days

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Kintetsu Group Holdings Co.,Ltd. (TSE:9041) is about to go ex-dividend in just three days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase Kintetsu Group HoldingsLtd's shares before the 28th of March to receive the dividend, which will be paid on the 24th of June.

The company's next dividend payment will be JP¥25.00 per share, on the back of last year when the company paid a total of JP¥50.00 to shareholders. Based on the last year's worth of payments, Kintetsu Group HoldingsLtd stock has a trailing yield of around 1.5% on the current share price of JP¥3409.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Kintetsu Group HoldingsLtd has a low and conservative payout ratio of just 19% of its income after tax. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out more than half (62%) of its free cash flow in the past year, which is within an average range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

View our latest analysis for Kintetsu Group HoldingsLtd

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Kintetsu Group HoldingsLtd, with earnings per share up 7.1% on average over the last five years. Decent historical earnings per share growth suggests Kintetsu Group HoldingsLtd has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. It looks like the Kintetsu Group HoldingsLtd dividends are largely the same as they were 10 years ago.

The Bottom Line

Has Kintetsu Group HoldingsLtd got what it takes to maintain its dividend payments? Earnings per share growth has been modest, and it's interesting that Kintetsu Group HoldingsLtd is paying out less than half of its earnings and more than half its cash flow to shareholders in the form of dividends. To summarise, Kintetsu Group HoldingsLtd looks okay on this analysis, although it doesn't appear a stand-out opportunity.

On that note, you'll want to research what risks Kintetsu Group HoldingsLtd is facing. For example, we've found 1 warning sign for Kintetsu Group HoldingsLtd that we recommend you consider before investing in the business.

If you're in the market for strong dividend payers, we recommend checking 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.