Japan Airlines (TSE:9201) Will Pay A Dividend Of ¥46.00

The board of Japan Airlines Co., Ltd. (TSE:9201) has announced that it will pay a dividend of ¥46.00 per share on the 5th of December. This takes the dividend yield to 3.1%, which shareholders will be pleased with.

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Japan Airlines' 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. However, prior to this announcement, Japan Airlines' 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.

The next year is set to see EPS grow by 6.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 33% by next year, which is in a pretty sustainable range.

View our latest analysis for Japan Airlines

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2015, the dividend has gone from ¥97.00 total annually to ¥92.00. Payments have been decreasing at a very slow pace in this time period. A company that decreases its dividend over time generally isn't what we are looking for.

Japan Airlines Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Japan Airlines has impressed us by growing EPS at 9.5% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Japan Airlines' prospects of growing its dividend payments in the future.

Japan Airlines Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Japan Airlines 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Japan Airlines that you should be aware of before investing. 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.