Chuo WarehouseLtd's (TSE:9319) Shareholders Will Receive A Bigger Dividend Than Last Year

Chuo Warehouse Co.,Ltd. (TSE:9319) will increase its dividend from last year's comparable payment on the 26th of June to ¥21.00. This takes the annual payment to 2.5% of the current stock price, which is about average for the industry.

View our latest analysis for Chuo WarehouseLtd

Chuo WarehouseLtd's Future Dividend Projections Appear Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Chuo WarehouseLtd was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 9.8% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.

Chuo WarehouseLtd Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was ¥22.50 in 2015, and the most recent fiscal year payment was ¥36.00. This works out to be a compound annual growth rate (CAGR) of approximately 4.8% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

We Could See Chuo WarehouseLtd's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Chuo WarehouseLtd has impressed us by growing EPS at 9.8% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Chuo WarehouseLtd's prospects of growing its dividend payments in the future.

Chuo WarehouseLtd 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. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Chuo WarehouseLtd management tenure, salary, and performance. If you are a dividend investor, you might also want to look at our curated list of high yield 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.