Nasdaq
华尔街日报ASO International, Inc. (TSE:9340) Pays A JP¥13.00 Dividend In Just Three Days
ASO International, Inc. (TSE:9340) stock is about to trade ex-dividend in 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase ASO International's shares on or after the 29th of December will not receive the dividend, which will be paid on the 31st of March.
The company's next dividend payment will be JP¥13.00 per share. Last year, in total, the company distributed JP¥24.00 to shareholders. Based on the last year's worth of payments, ASO International has a trailing yield of 3.4% on the current stock price of JP¥710.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether ASO International has been able to grow its dividends, or if the dividend might be cut.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. ASO International paid out a comfortable 44% 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. Over the last year it paid out 60% of its free cash flow as dividends, within the usual range for most companies.
It's positive to see that ASO International'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.
View our latest analysis for ASO International
Click here to see how much of its profit ASO International paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about ASO International's flat earnings over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. ASO International has delivered 51% dividend growth per year on average over the past two years.
To Sum It Up
From a dividend perspective, should investors buy or avoid ASO International? Earnings per share are down very slightly in recent times, and ASO International paid out less half its profit and more than half its cash flow as dividends, which is not the worst combination but could be better. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of ASO International's dividend merits.
With that being said, if dividends aren't your biggest concern with ASO International, you should know about the other risks facing this business. Case in point: We've spotted 1 warning sign for ASO International you should be aware of.
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.