Maruwn's (TSE:9067) Shareholders Will Receive A Bigger Dividend Than Last Year

Maruwn Corporation (TSE:9067) has announced that it will be increasing its dividend from last year's comparable payment on the 10th of June to ¥11.00. This will take the dividend yield to an attractive 3.5%, providing a nice boost to shareholder returns.

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Maruwn's Projected Earnings Seem Likely To Cover Future Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Maruwn 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 could expand by 2.4% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 46% by next year, which is in a pretty sustainable range.

See our latest analysis for Maruwn

Maruwn Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥7.00 total annually to ¥16.00. This means that it has been growing its distributions at 8.6% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

Maruwn May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, Maruwn has only grown its earnings per share at 2.4% per annum over the past five years. While EPS growth is quite low, Maruwn has the option to increase the payout ratio to return more cash to shareholders.

We Really Like Maruwn's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 3 warning signs for Maruwn (of which 1 doesn't sit too well with us!) you should know about. 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.