There's A Lot To Like About Tokio Marine Holdings' (TSE:8766) Upcoming JP¥122.50 Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Tokio Marine Holdings, Inc. (TSE:8766) is about to go ex-dividend in just 2 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Tokio Marine Holdings' shares on or after the 29th of September, you won't be eligible to receive the dividend, when it is paid on the 14th of December.
The company's upcoming dividend is JP¥122.50 a share, following on from the last 12 months, when the company distributed a total of JP¥245 per share to shareholders. Based on the last year's worth of payments, Tokio Marine Holdings stock has a trailing yield of around 3.1% on the current share price of JP¥7992.00. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. It paid out 77% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. We'd be concerned if earnings began to decline.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
View our latest analysis for Tokio Marine Holdings
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Tokio Marine Holdings has grown its earnings rapidly, up 30% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Tokio Marine Holdings has delivered 18% dividend growth per year on average over the past 10 years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
To Sum It Up
Is Tokio Marine Holdings worth buying for its dividend? Earnings per share are growing nicely, and Tokio Marine Holdings is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, Tokio Marine Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
While it's tempting to invest in Tokio Marine Holdings for the dividends alone, you should always be mindful of the risks involved. Case in point: We've spotted 1 warning sign for Tokio Marine 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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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.