CSS HoldingsLtd (TSE:2304) Has Announced A Dividend Of ¥15.00
The board of CSS Holdings,Ltd. (TSE:2304) has announced that it will pay a dividend of ¥15.00 per share on the 22nd of June. This means the annual payment is 3.6% of the current stock price, which is above the average for the industry.
CSS HoldingsLtd's Future Dividend Projections Appear Well Covered By Earnings
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Before making this announcement, CSS HoldingsLtd was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
Over the next year, EPS could expand by 92.0% if recent trends continue. If the dividend continues on this path, the payout ratio could be 22% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for CSS HoldingsLtd
Dividend Volatility
The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2016, the dividend has gone from ¥9.00 total annually to ¥35.00. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that CSS HoldingsLtd has grown earnings per share at 92% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
We Really Like CSS HoldingsLtd's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for CSS HoldingsLtd 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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