RACCOON HOLDINGS, Inc. (TSE:3031) Pays A JP¥11.00 Dividend In Just Three Days
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see RACCOON HOLDINGS, Inc. (TSE:3031) 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 important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase RACCOON HOLDINGS' shares before the 29th of October to receive the dividend, which will be paid on the 13th of January.
The company's next dividend payment will be JP¥11.00 per share. Last year, in total, the company distributed JP¥22.00 to shareholders. Looking at the last 12 months of distributions, RACCOON HOLDINGS has a trailing yield of approximately 3.3% on its current stock price of JP¥666.00. 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! We need to see whether the dividend is covered by earnings and if it's growing.
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. RACCOON HOLDINGS is paying out an acceptable 63% 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. It distributed 49% of its free cash flow as dividends, a comfortable payout level for most companies.
It's positive to see that RACCOON HOLDINGS'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.
Check out our latest analysis for RACCOON HOLDINGS
Click here to see how much of its profit RACCOON HOLDINGS 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. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at RACCOON HOLDINGS, with earnings per share up 3.8% on average over the last five years. Earnings per share growth has been slim, and the company is already paying out a majority of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, RACCOON HOLDINGS has lifted its dividend by approximately 22% 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.
Final Takeaway
Is RACCOON HOLDINGS worth buying for its dividend? While earnings per share growth has been modest, RACCOON HOLDINGS'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. In summary, while it has some positive characteristics, we're not inclined to race out and buy RACCOON HOLDINGS today.
On that note, you'll want to research what risks RACCOON HOLDINGS is facing. Case in point: We've spotted 2 warning signs for RACCOON HOLDINGS you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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