Japan Internet Initiative Corporation (TSE:3774) Investors will receive a payment of 17.18 yen per share on July 1. This brings the annual payment to 1.2% of the current share price, which unfortunately is less than what the industry pays.
Check out our latest analysis for Japan Internet Initiative
Internet Initiative Japan’s dividend well covered by earnings
While yield is important, another factor to consider with a company’s dividend is whether current payout levels are viable. Prior to this announcement, JII’s revenue was easily enough to cover its dividend. This means that most of the business’s revenue is used to help it grow.
Earnings per share are expected to grow 67.8% next year. If the dividend continues on this path, the payout ratio could reach 23% by next year, which we think is quite sustainable going forward.
Japan Internet Initiative has a strong track record
The company has been paying dividends for a long time and is quite stable, which gives us confidence in its future dividend potential. Dividends increased from an annual total of 5.50 yen in 2014 to the most recent annual payment total of 34.36 yen. During this period, the compound annual growth rate (CAGR) was approximately 20% per year. We can see that payments have shown some very good upward momentum and haven’t wavered, which provides some assurance that future payments will be reliable as well.
Dividends look likely to grow
Some investors will be eager to buy some shares of the company based on its dividend history. We’re glad to see that Internet Initiative Japan has grown earnings per share at 39% per year over the last five years. Rapid earnings growth and a low payout ratio suggest the company has been reinvesting in its business effectively. If this continues, this company may have a bright future.
Japan Internet Initiative looks like a great dividend stock
Overall, we think this could be an attractive income stock, and it will only get better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this ticks many of the boxes we need to consider when choosing income stocks.
Investors generally tend to favor companies with consistent, stable dividend policies over those with irregular operations. At the same time, while dividend payments are important, they aren’t the only factors our readers should be aware of when evaluating a company. Companies that grow earnings tend to make the best dividend stocks over the long term.Check out what the 8 analysts we track are predicting for the Japanese internet initiative free and public analyst estimates for the company. Looking for more high-yield dividend ideas?try our Bringing together powerful dividend payers.
Valuation is complex, but we’re helping to make it simple.
see if Japan Internet Initiative could be overvalued or undervalued by looking at our comprehensive analysis, which includes Fair value estimates, risks and warnings, dividends, insider trading and financial health.
View free analysis
Have feedback on this article? Follow the content? keep in touch Contact us directly. Alternatively, email the editorial team at (at) simplewallst.com.
This article from Simply Wall St is general in nature. We only use unbiased methodologies to provide commentary based on historical data and analyst forecasts, and our articles are not intended to provide financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not consider the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.