Create Medic (TSE:5187) Has Announced A Dividend Of ¥20.00

The board of Create Medic Co., Ltd. (TSE:5187) has announced that it will pay a dividend of ¥20.00 per share on the 31st of March. This makes the dividend yield 3.6%, which will augment investor returns quite nicely.

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Create Medic's Future Dividend Projections Appear Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Create Medic's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

If the trend of the last few years continues, EPS will grow by 5.1% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 39% by next year, which is in a pretty sustainable range.

View our latest analysis for Create Medic

Create Medic Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was ¥35.00 in 2015, and the most recent fiscal year payment was ¥37.00. Dividend payments have been growing, but very slowly over the period. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

Create Medic Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Create Medic has grown earnings per share at 5.1% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Create Medic's prospects of growing its dividend payments in the future.

We Really Like Create Medic'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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, Create Medic has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about. Is Create Medic not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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