The board of SENKO Group Holdings Co., Ltd. (TSE:9069) has announced that it will pay a dividend of ¥23.00 per share on the 27th of June. Based on this payment, the dividend yield for the company will be 3.1%, which is fairly typical for the industry.
See our latest analysis for SENKO Group Holdings
SENKO Group Holdings' Future Dividend Projections Appear Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. SENKO Group Holdings is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.
The next year is set to see EPS grow by 9.8%. If the dividend continues on this path, the payout ratio could be 39% by next year, which we think can be pretty sustainable going forward.
SENKO Group Holdings Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥16.00 total annually to ¥46.00. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
We Could See SENKO Group Holdings' Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that SENKO Group Holdings has grown earnings per share at 7.1% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for SENKO Group Holdings' prospects of growing its dividend payments in the future.
Our Thoughts On SENKO Group Holdings' Dividend
In summary, while it's always good to see the dividend being raised, we don't think SENKO Group Holdings' payments are rock solid. While SENKO Group Holdings is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, SENKO Group Holdings has 2 warning signs (and 1 which can't be ignored) we think you should know about. Is SENKO Group Holdings not quite the opportunity you were looking for? Why not check out 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.
About TSE:9069
Proven track record average dividend payer.
