MEISEI INDUSTRIAL Co.,Ltd. (TSE:1976) Stock Goes Ex-Dividend In Just Three Days

MEISEI INDUSTRIAL Co.,Ltd. (TSE:1976) is about to trade ex-dividend in the next 3 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. This means that investors who purchase MEISEI INDUSTRIALLtd's shares on or after the 29th of September will not receive the dividend, which will be paid on the 24th of November.

The company's next dividend payment will be JP¥25.00 per share, on the back of last year when the company paid a total of JP¥65.00 to shareholders. Based on the last year's worth of payments, MEISEI INDUSTRIALLtd stock has a trailing yield of around 3.8% on the current share price of JP¥1724.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. MEISEI INDUSTRIALLtd is paying out an acceptable 55% of its profit, a common payout level among most companies. 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. Fortunately, it paid out only 47% of its free cash flow in the past year.

It's positive to see that MEISEI INDUSTRIALLtd'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.

See our latest analysis for MEISEI INDUSTRIALLtd

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see MEISEI INDUSTRIALLtd earnings per share are up 6.1% per annum over the last five years. Decent historical earnings per share growth suggests MEISEI INDUSTRIALLtd has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. Therefore it's unlikely that the company will be able to reinvest heavily in its business, which could presage slower growth in the future.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, MEISEI INDUSTRIALLtd has lifted its dividend by approximately 21% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Is MEISEI INDUSTRIALLtd an attractive dividend stock, or better left on the shelf? While earnings per share growth has been modest, MEISEI INDUSTRIALLtd's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. All things considered, we are not particularly enthused about MEISEI INDUSTRIALLtd from a dividend perspective.

Curious about whether MEISEI INDUSTRIALLtd has been able to consistently generate growth? Here's a chart of its historical revenue and earnings growth.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.