Only Three Days Left To Cash In On Pickles HoldingsLtd's (TSE:2935) Dividend

Pickles Holdings Co.,Ltd. (TSE:2935) stock is about to trade ex-dividend in 3 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Pickles HoldingsLtd investors that purchase the stock on or after the 28th of August will not receive the dividend, which will be paid on the 6th of November.

The company's next dividend payment will be JP¥15.00 per share, and in the last 12 months, the company paid a total of JP¥29.00 per share. Last year's total dividend payments show that Pickles HoldingsLtd has a trailing yield of 2.5% on the current share price of JP¥1180.00. If you buy this business for its dividend, you should have an idea of whether Pickles HoldingsLtd's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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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. Pickles HoldingsLtd paid out a comfortable 25% of its profit last year. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 9.6% of its cash flow last year.

It's positive to see that Pickles HoldingsLtd's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

View our latest analysis for Pickles HoldingsLtd

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. So we're not too excited that Pickles HoldingsLtd's earnings are down 4.5% a year over the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Pickles HoldingsLtd has lifted its dividend by approximately 13% a year on average.

To Sum It Up

Is Pickles HoldingsLtd worth buying for its dividend? Pickles HoldingsLtd has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Pickles HoldingsLtd's dividend merits.

In light of that, while Pickles HoldingsLtd has an appealing dividend, it's worth knowing the risks involved with this stock. Every company has risks, and we've spotted 1 warning sign for Pickles HoldingsLtd you should know about.

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.