Tokyo Electron Device (TSE:2760) Has Announced A Dividend Of ¥64.00
Tokyo Electron Device Limited (TSE:2760) has announced that it will pay a dividend of ¥64.00 per share on the 1st of June. The yield is still above the industry average at 2.9%.
Tokyo Electron Device's Future Dividend Projections Appear Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained. The last dividend was quite easily covered by Tokyo Electron Device's earnings. This means that a large portion of its earnings are being retained to grow the business.
Over the next year, EPS is forecast to expand by 12.9%. If the dividend continues on this path, the payout ratio could be 44% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for Tokyo Electron Device
Dividend Volatility
While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2015, the annual payment back then was ¥20.00, compared to the most recent full-year payment of ¥99.00. This means that it has been growing its distributions at 17% per annum over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Tokyo Electron Device has been growing its earnings per share at 27% a 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 Tokyo Electron Device could prove to be a strong dividend payer.
Tokyo Electron Device Looks Like A Great Dividend Stock
Overall, we think that Tokyo Electron Device could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. Reducing the amount it is paying as a dividend can protect the company's balance sheet, keeping the dividend sustainable for longer. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 3 warning signs for Tokyo Electron Device that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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