MARUKA FURUSATO Corporation (TSE:7128) Goes Ex-Dividend Soon

It looks like MARUKA FURUSATO Corporation (TSE:7128) is about to go ex-dividend in the next three days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase MARUKA FURUSATO's shares before the 29th of December to receive the dividend, which will be paid on the 31st of March.

The company's upcoming dividend is JP¥71.00 a share, following on from the last 12 months, when the company distributed a total of JP¥101 per share to shareholders. Based on the last year's worth of payments, MARUKA FURUSATO has a trailing yield of 4.4% on the current stock price of JP¥2300.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether MARUKA FURUSATO has been able to grow its dividends, or if the dividend might be cut.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. It paid out 87% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. We'd be concerned if earnings began to decline. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It distributed 37% of its free cash flow as dividends, a comfortable payout level for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Check out our latest analysis for MARUKA FURUSATO

Click here to see how much of its profit MARUKA FURUSATO paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That explains why we're not overly excited about MARUKA FURUSATO's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. MARUKA FURUSATO has delivered an average of 25% per year annual increase in its dividend, based on the past four years of dividend payments.

The Bottom Line

From a dividend perspective, should investors buy or avoid MARUKA FURUSATO? The payout ratios appear reasonably conservative, which implies the dividend may be somewhat sustainable. Still, with earnings basically flat, MARUKA FURUSATO doesn't stand out from a dividend perspective. To summarise, MARUKA FURUSATO looks okay on this analysis, although it doesn't appear a stand-out opportunity.

However if you're still interested in MARUKA FURUSATO as a potential investment, you should definitely consider some of the risks involved with MARUKA FURUSATO. Case in point: We've spotted 2 warning signs for MARUKA FURUSATO you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.