Warabeya Nichiyo Holdings Co., Ltd. (TSE:2918) has announced that it will be paying a dividend of ¥45.00 on the 15th of November, with a dividend yield of 3.5% which is above the industry average.
Before this announcement, the company’s earnings were able to cover the dividend, but its free cash flows were negative. This could potentially make it difficult for the company to continue paying out dividends in the future.
Looking ahead, Warabeya Nichiyo Holdings is projected to see EPS grow by 12.8% in the next year. If the dividend follows recent trends, the payout ratio is estimated to be 35%, which is within a sustainable range.
The company has a solid track record of paying dividends, with a stable history of payments over the last 10 years. The annual payment has grown at a compound annual growth rate of approximately 9.9% during this time.
Investors in Warabeya Nichiyo Holdings have been receiving dividend income for some time, as the company has seen EPS rise by 48% per annum over the last five years. This, along with a low payout ratio, suggests that the company has been effectively reinvesting in its business for future growth.
Overall, while the company may not be considered a top-tier income stock due to its lacking cash flows, it still presents a decent opportunity for investors. It’s important to consider a company’s dividend policy and other factors when analyzing stock performance.
If you’re interested in learning more about Warabeya Nichiyo Holdings’ valuation and potential, you can check out our comprehensive analysis which includes fair value estimates, risks, dividends, insider transactions, and financial health.
As always, it’s important to conduct your own research and consider your own financial situation before making any investment decisions.