T.Kawabe's (TSE:8123) Dividend Will Be ¥50.00

T.Kawabe & Co., Ltd.'s (TSE:8123) investors are due to receive a payment of ¥50.00 per share on 26th of June. The dividend yield will be 3.4% based on this payment which is still above the industry average.

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T.Kawabe's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, T.Kawabe was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 66.3% if recent trends continue. If the dividend continues on this path, the payout ratio could be 11% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for T.Kawabe

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The payments haven't really changed that much since 10 years ago. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. T.Kawabe has seen EPS rising for the last five years, at 66% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

T.Kawabe 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 2 warning signs for T.Kawabe that investors should know about before committing capital to this stock. Is T.Kawabe not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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