Nissin (TSE:9066) Has Announced That It Will Be Increasing Its Dividend To ¥60.00

The board of Nissin Corporation (TSE:9066) has announced that it will be paying its dividend of ¥60.00 on the 10th of June, an increased payment from last year's comparable dividend. This makes the dividend yield 4.1%, which is above the industry average.

See our latest analysis for Nissin

Nissin's Payment Has Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Nissin 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 could rise by 12.7% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 26% by next year, which is in a pretty sustainable range.

Nissin Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥35.00, compared to the most recent full-year payment of ¥120.00. This means that it has been growing its distributions at 13% 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.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Nissin has impressed us by growing EPS at 13% per year over the past five years. Nissin definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Nissin Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Nissin 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Are management backing themselves to deliver performance? Check their shareholdings in Nissin in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.