Is It Smart To Buy ASKA Pharmaceutical Holdings Co.,Ltd. (TSE:4886) Before It Goes Ex-Dividend?
Readers hoping to buy ASKA Pharmaceutical Holdings Co.,Ltd. (TSE:4886) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase ASKA Pharmaceutical HoldingsLtd's shares before the 29th of September in order to receive the dividend, which the company will pay on the 30th of November.
The company's next dividend payment will be JP¥32.00 per share, on the back of last year when the company paid a total of JP¥65.00 to shareholders. Looking at the last 12 months of distributions, ASKA Pharmaceutical HoldingsLtd has a trailing yield of approximately 3.0% on its current stock price of JP¥2136.00. 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! As a result, readers should always check whether ASKA Pharmaceutical HoldingsLtd has been able to grow its dividends, or if the dividend might be cut.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. ASKA Pharmaceutical HoldingsLtd paid out a comfortable 36% of its profit last year. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It distributed 47% of its free cash flow as dividends, a comfortable payout level for most companies.
It's positive to see that ASKA Pharmaceutical HoldingsLtd's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
View our latest analysis for ASKA Pharmaceutical HoldingsLtd
Click here to see how much of its profit ASKA Pharmaceutical HoldingsLtd 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. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, ASKA Pharmaceutical HoldingsLtd's earnings per share have been growing at 12% a year for the past five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. ASKA Pharmaceutical HoldingsLtd has delivered an average of 17% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
Final Takeaway
Should investors buy ASKA Pharmaceutical HoldingsLtd for the upcoming dividend? ASKA Pharmaceutical HoldingsLtd has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. There's a lot to like about ASKA Pharmaceutical HoldingsLtd, and we would prioritise taking a closer look at it.
While it's tempting to invest in ASKA Pharmaceutical HoldingsLtd for the dividends alone, you should always be mindful of the risks involved. In terms of investment risks, we've identified 1 warning sign with ASKA Pharmaceutical HoldingsLtd and understanding them should be part of your investment process.
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.