Japan Internet Initiative Corporation TSE: 3774) will pay a dividend of 17.18 yen 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 payments have solid profitability
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 67.9% next year. Assuming the dividend continues along recent trends, we think the payout ratio could reach 23% next year, which is a fairly sustainable range.
Japan Internet Initiative has a strong track record
The company has a long history of paying consistent dividends. Since 2014, when the annual payment was 5.50 yen, the most recent full-year payment was 34.36 yen. This means the company has grown its distribution at about 20% per year during this period. As a result, dividends have grown quite quickly, and even more impressively, they haven’t experienced any significant declines during this period.
Dividends look likely to grow
Investors in the company will be happy to have been receiving dividend income for some time. We’ve been impressed by Japan Internet Initiative, with earnings per share growing 39% per year over the past 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, it’s always good to see dividend increases, and we think Internet Initiative Japan is a strong income stock thanks to its track record and growing earnings. The company easily generated enough earnings to cover its dividend, and it’s good to see that these earnings are converting into cash flow. With all this in mind, this looks like it could be a great dividend opportunity.
Notably, companies with a consistent dividend policy generate greater investor confidence than companies with an erratic dividend policy. In the meantime, there are other factors our readers should be aware of before putting money into stocks. 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.
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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 take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.