MITSUI-SOKO HOLDINGS' (TSE:9302) Dividend Will Be ¥73.00

MITSUI-SOKO HOLDINGS Co., Ltd. (TSE:9302) will pay a dividend of ¥73.00 on the 4th of December. This takes the annual payment to 3.0% of the current stock price, which is about average for the industry.

Check out our latest analysis for MITSUI-SOKO HOLDINGS

MITSUI-SOKO HOLDINGS' Payment Has Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. However, prior to this announcement, MITSUI-SOKO HOLDINGS' dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

EPS is set to fall by 0.4% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio could be 37%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The dividend has gone from an annual total of ¥45.00 in 2014 to the most recent total annual payment of ¥146.00. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. MITSUI-SOKO HOLDINGS has seen EPS rising for the last five years, at 18% per annum. MITSUI-SOKO HOLDINGS definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

MITSUI-SOKO HOLDINGS Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for MITSUI-SOKO HOLDINGS (1 is significant!) 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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