The board of SERAKU Co., Ltd. (TSE:6199) has announced an increased dividend payment of ¥13.00 on November 25th, up from last year’s amount. This brings the annual payment to 1.1% of the current stock price, which is slightly lower than the industry average.
SERAKU has solid earnings coverage for its dividend payments, with the company easily earning enough to cover the dividend before the announcement. With a forecasted 35.0% increase in EPS over the next year, the payout ratio is estimated to be 12%, indicating sustainability of the dividend.
While SERAKU has a stable dividend payment history since 2018, growing distributions at a rate of about 26% annually, there is caution about its performance through a full economic cycle. However, with earnings per share growing at 30% per year over the past five years and a low payout ratio, the company shows potential as a great dividend stock.
In summary, the increased dividend payment and overall sustainability of SERAKU’s earnings are positive indicators. The company’s ability to cover dividend payments and translate earnings into cash flow make it a strong income stock option. Considerations like management’s performance and insider ownership can provide additional insights into the company’s stock performance.