Sankyu (TSE:9065) Will Pay A Dividend Of ¥116.00

The board of Sankyu Inc. (TSE:9065) has announced that it will pay a dividend of ¥116.00 per share on the 5th of December. This makes the dividend yield about the same as the industry average at 2.8%.

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Sankyu's Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, prior to this announcement, Sankyu's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 7.9%. Assuming the dividend continues along recent trends, we think the payout ratio could be 43% by next year, which is in a pretty sustainable range.

View our latest analysis for Sankyu

Sankyu Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥50.00 in 2015 to the most recent total annual payment of ¥232.00. This means that it has been growing its distributions at 17% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

Sankyu Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Sankyu has impressed us by growing EPS at 8.8% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Sankyu Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 Sankyu analysts we track are forecasting continued growth with our free report on 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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