Japan Airport Terminal (TSE:9706) Will Pay A Dividend Of ¥35.00

The board of Japan Airport Terminal Co., Ltd. (TSE:9706) has announced that it will pay a dividend of ¥35.00 per share on the 27th of June. This means that the dividend yield is 1.4%, which is a bit low when comparing to other companies in the industry.

Check out our latest analysis for Japan Airport Terminal

Japan Airport Terminal's Projected Earnings Seem Likely To Cover Future Distributions

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Japan Airport Terminal was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 0.5% over the next year. If the dividend continues on this path, the payout ratio could be 30% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of ¥11.00 in 2014 to the most recent total annual payment of ¥70.00. This means that it has been growing its distributions at 20% per annum over that time. Japan Airport Terminal has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Japan Airport Terminal has seen EPS rising for the last five years, at 13% per annum. Japan Airport Terminal definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Japan Airport Terminal Looks Like A Great Dividend Stock

Overall, we think that Japan Airport Terminal could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. By reducing the dividend, pressure will be taken off the balance sheet, which could help the dividend to be consistent in the future. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 2 warning signs for Japan Airport Terminal (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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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.