Kyushu Electric Power Company's (TSE:9508) Dividend Will Be ¥25.00

Kyushu Electric Power Company, Incorporated's (TSE:9508) investors are due to receive a payment of ¥25.00 per share on 3rd of December. The dividend yield will be 3.7% based on this payment which is still above the industry average.

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Kyushu Electric Power Company's Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Before making this announcement, Kyushu Electric Power Company 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 0.9% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 21%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Kyushu Electric Power Company

Kyushu Electric Power Company's Dividend Has Lacked Consistency

Kyushu Electric Power Company has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. The dividend has gone from an annual total of ¥5.00 in 2016 to the most recent total annual payment of ¥50.00. This works out to be a compound annual growth rate (CAGR) of approximately 29% a year over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Kyushu Electric Power Company has grown earnings per share at 35% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Kyushu Electric Power Company Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 3 warning signs for Kyushu Electric Power Company (1 shouldn't be ignored!) that you should be aware of before investing. Is Kyushu Electric Power Company not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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