Nasdaq
华尔街日报IDEA Consultants,Inc. (TSE:9768) Pays A JP¥118.00 Dividend In Just Four Days
IDEA Consultants,Inc. (TSE:9768) stock is about to trade ex-dividend in four days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase IDEA ConsultantsInc's shares before the 29th of December to receive the dividend, which will be paid on the 30th of March.
The company's next dividend payment will be JP¥118.00 per share, and in the last 12 months, the company paid a total of JP¥118 per share. Based on the last year's worth of payments, IDEA ConsultantsInc stock has a trailing yield of around 3.1% on the current share price of JP¥3830.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether IDEA ConsultantsInc can afford its dividend, and if the dividend could grow.
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. IDEA ConsultantsInc paid out a comfortable 35% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Dividends consumed 54% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Check out our latest analysis for IDEA ConsultantsInc
Click here to see how much of its profit IDEA ConsultantsInc paid out over the last 12 months.
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. This is why it's a relief to see IDEA ConsultantsInc earnings per share are up 7.0% per annum over the last five years. Decent historical earnings per share growth suggests IDEA ConsultantsInc 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. In the past 10 years, IDEA ConsultantsInc has increased its dividend at approximately 25% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Is IDEA ConsultantsInc worth buying for its dividend? Earnings per share growth has been modest, and it's interesting that IDEA ConsultantsInc is paying out less than half of its earnings and more than half its cash flow to shareholders in the form of dividends. To summarise, IDEA ConsultantsInc looks okay on this analysis, although it doesn't appear a stand-out opportunity.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we've discovered 1 warning sign for IDEA ConsultantsInc that you should be aware of before investing in their shares.
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.