Should You Buy Japan Investment Adviser Co., Ltd. (TSE:7172) For Its Upcoming Dividend?
Readers hoping to buy Japan Investment Adviser Co., Ltd. (TSE:7172) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. 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. Accordingly, Japan Investment Adviser investors that purchase the stock on or after the 29th of December will not receive the dividend, which will be paid on the 27th of March.
The company's next dividend payment will be JP¥44.00 per share. Last year, in total, the company distributed JP¥88.00 to shareholders. Based on the last year's worth of payments, Japan Investment Adviser has a trailing yield of 4.2% on the current stock price of JP¥2100.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
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. Japan Investment Adviser paid out a comfortable 27% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Check out our latest analysis for Japan Investment Adviser
Click here to see how much of its profit Japan Investment Adviser paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Japan Investment Adviser earnings per share are up 7.0% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Japan Investment Adviser has lifted its dividend by approximately 33% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Final Takeaway
Is Japan Investment Adviser worth buying for its dividend? Japan Investment Adviser has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Overall, Japan Investment Adviser looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Every company has risks, and we've spotted 3 warning signs for Japan Investment Adviser (of which 1 doesn't sit too well with us!) you should know about.
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.