Tsukamoto Corporation (TSE:8025) Is Due To Pay A Dividend Of ¥30.00
Tsukamoto Corporation Co., Ltd. (TSE:8025) will pay a dividend of ¥30.00 on the 27th of June. This payment means that the dividend yield will be 2.1%, which is around the industry average.
Tsukamoto Corporation's Distributions May Be Difficult To Sustain
Solid dividend yields are great, but they only really help us if the payment is sustainable. Despite not generating a profit, Tsukamoto Corporation is still paying a dividend. Along with this, it is also not generating free cash flows, which raises concerns about the sustainability of the dividend.
Over the next year, EPS might fall by 34.6% based on recent performance. This will push the company into unprofitability, which means the managers will have to choose between suspending the dividend, or paying it out of cash reserves.
View our latest analysis for Tsukamoto Corporation
Tsukamoto Corporation Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The most recent annual payment of ¥30.00 is about the same as the annual payment 10 years ago. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
The Dividend Has Limited Growth Potential
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. Tsukamoto Corporation's earnings per share has shrunk at 35% a year over the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future.
Tsukamoto Corporation's Dividend Doesn't Look Sustainable
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We don't think Tsukamoto Corporation is a great stock to add to your portfolio if income is your focus.
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. Just as an example, we've come across 4 warning signs for Tsukamoto Corporation you should be aware of, and 3 of them shouldn't be ignored. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.