It looks like HYUGA PRIMARY CARE Co.,Ltd. (TSE:7133) is about to go ex-dividend in the next three days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Therefore, if you purchase HYUGA PRIMARY CARELtd's shares on or after the 30th of March, you won't be eligible to receive the dividend, when it is paid on the 29th of June.
The company's upcoming dividend is JP¥20.00 a share, following on from the last 12 months, when the company distributed a total of JP¥20.00 per share to shareholders. Based on the last year's worth of payments, HYUGA PRIMARY CARELtd stock has a trailing yield of around 1.8% on the current share price of JP¥1089.00. If you buy this business for its dividend, you should have an idea of whether HYUGA PRIMARY CARELtd's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. HYUGA PRIMARY CARELtd paid out just 25% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. HYUGA PRIMARY CARELtd paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.
Check out our latest analysis for HYUGA PRIMARY CARELtd
Click here to see how much of its profit HYUGA PRIMARY CARELtd paid out over the last 12 months.
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, it's good to see earnings have grown 5.2% on last year.
One year is a very short time frame in the pantheon of investing, so we wouldn't get too hung up on these numbers.
Unfortunately HYUGA PRIMARY CARELtd has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
From a dividend perspective, should investors buy or avoid HYUGA PRIMARY CARELtd? HYUGA PRIMARY CARELtd has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. In summary, HYUGA PRIMARY CARELtd appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
So while HYUGA PRIMARY CARELtd looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Every company has risks, and we've spotted 4 warning signs for HYUGA PRIMARY CARELtd (of which 1 is significant!) you should know about.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.