SIGMAXYZ Holdings' (TSE:6088) Upcoming Dividend Will Be Larger Than Last Year's

SIGMAXYZ Holdings Inc.'s (TSE:6088) dividend will be increasing from last year's payment of the same period to ¥26.00 on 8th of June. This takes the dividend yield to 3.1%, which shareholders will be pleased with.

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SIGMAXYZ Holdings' Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, SIGMAXYZ Holdings' dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 19.0% over the next year. If the dividend continues on this path, the payout ratio could be 50% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for SIGMAXYZ Holdings

SIGMAXYZ Holdings Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥3.00 in 2015 to the most recent total annual payment of ¥26.00. This means that it has been growing its distributions at 24% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that SIGMAXYZ Holdings has grown earnings per share at 29% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that SIGMAXYZ Holdings could prove to be a strong dividend payer.

SIGMAXYZ Holdings Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that SIGMAXYZ Holdings is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for SIGMAXYZ Holdings that investors should know about before committing capital to this stock. Is SIGMAXYZ Holdings not quite the opportunity you were looking for? Why not check out our selection of top 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.