Chilled & Frozen Logistics Holdings (TSE:9099) Is Due To Pay A Dividend Of ¥17.00

The board of Chilled & Frozen Logistics Holdings Co., Ltd. (TSE:9099) has announced that it will pay a dividend on the 1st of July, with investors receiving ¥17.00 per share. This will take the annual payment to 1.9% of the stock price, which is above what most companies in the industry pay.

See our latest analysis for Chilled & Frozen Logistics Holdings

Chilled & Frozen Logistics Holdings' Payment Has Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Chilled & Frozen Logistics Holdings' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 10.4%. If the dividend continues on this path, the payout ratio could be 22% by next year, which we think can be pretty sustainable going forward.

Chilled & Frozen Logistics Holdings Doesn't Have A Long Payment History

It is great to see that Chilled & Frozen Logistics Holdings has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2016, the dividend has gone from ¥20.00 total annually to ¥34.00. This works out to be a compound annual growth rate (CAGR) of approximately 6.9% a year over that time. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.

We Could See Chilled & Frozen Logistics Holdings' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Chilled & Frozen Logistics Holdings has been growing its earnings per share at 7.2% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Our Thoughts On Chilled & Frozen Logistics Holdings' Dividend

Overall, this is a reasonable dividend, and it being raised is an added bonus. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Chilled & Frozen Logistics Holdings that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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