GMO Payment Gateway, Inc. (TSE:3769) Looks Interesting, And It's About To Pay A Dividend
GMO Payment Gateway, Inc. (TSE:3769) stock is about to trade ex-dividend in four 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. 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. In other words, investors can purchase GMO Payment Gateway's shares before the 29th of September in order to be eligible for the dividend, which will be paid on the 16th of December.
The company's next dividend payment will be JP¥170.00 per share, and in the last 12 months, the company paid a total of JP¥170 per share. Looking at the last 12 months of distributions, GMO Payment Gateway has a trailing yield of approximately 1.9% on its current stock price of JP¥8728.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. GMO Payment Gateway paid out a comfortable 43% of its profit last year.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
View our latest analysis for GMO Payment Gateway
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
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. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see GMO Payment Gateway has grown its earnings rapidly, up 26% a year for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. GMO Payment Gateway has delivered 31% dividend growth per year on average over the past 10 years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
To Sum It Up
Should investors buy GMO Payment Gateway for the upcoming dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, GMO Payment Gateway appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
In light of that, while GMO Payment Gateway has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for GMO Payment Gateway that you should be aware of before investing in their shares.
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.