Kubota's (TSE:6326) Dividend Will Be ¥25.00

The board of Kubota Corporation (TSE:6326) has announced that it will pay a dividend on the 24th of March, with investors receiving ¥25.00 per share. This means the dividend yield will be fairly typical at 2.2%.

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Kubota'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, Kubota's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 9.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 32% by next year, which is in a pretty sustainable range.

See our latest analysis for Kubota

Kubota Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ¥28.00 in 2015, and the most recent fiscal year payment was ¥50.00. This works out to be a compound annual growth rate (CAGR) of approximately 6.0% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

We Could See Kubota's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Kubota has grown earnings per share at 8.7% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Kubota's prospects of growing its dividend payments in the future.

We Really Like Kubota's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Kubota that you should be aware of before investing. Is Kubota not quite the opportunity you were looking for? Why not check out 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.