Sakurajima Futo Kaisha (TSE:9353) Has Announced That It Will Be Increasing Its Dividend To ¥45.00

Sakurajima Futo Kaisha, Ltd.'s (TSE:9353) dividend will be increasing from last year's payment of the same period to ¥45.00 on 27th of June. The payment will take the dividend yield to 1.9%, which is in line with the average for the industry.

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Sakurajima Futo Kaisha's Projected Earnings Seem Likely To Cover Future Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, prior to this announcement, Sakurajima Futo Kaisha's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share could rise by 6.4% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 21% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Sakurajima Futo Kaisha

Sakurajima Futo Kaisha Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2016, the dividend has gone from ¥10.00 total annually to ¥45.00. This means that it has been growing its distributions at 16% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Sakurajima Futo Kaisha Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Sakurajima Futo Kaisha has impressed us by growing EPS at 6.4% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Sakurajima Futo Kaisha's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Case in point: We've spotted 2 warning signs for Sakurajima Futo Kaisha (of which 1 is potentially serious!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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