Why you could be occupied with Nippon Antenna Co., Ltd (TYO: 6930) For the upcoming dividend
Some investors rely on dividends to grow their wealth, and if you’re one of those dividend hawkers you might be intrigued to know Nippon Antenna Co., Ltd. (TYO: 6930) is close to ex-dividend in just 4 days. You must buy stocks before March 30th to receive the dividend, which will be paid on June 29th.
Nippon AntennaLtd’s next dividend payment will be JPY21.00 per share, after the company paid a total of JPY21.00 to shareholders last year. Based on last year’s payment value, Nippon AntennaLtd has a trailing return of 2.2% on the current share price of 972 yen. Dividends are a significant contributor to long-term owners’ return on investment, but only if the dividend continues to be paid out. Therefore, we should always check whether the dividend payments appear sustainable and whether the company is growing.
Check out our latest analysis for Nippon AntennaLtd
Dividends are typically paid out of corporate profits. If a company pays more dividends than profits, the dividend cannot be sustainable. Nippon AntennaLtd paid out more than half (52%) of its profits last year, which is a regular payout ratio for most companies. However, cash flow is usually more important than profit in assessing the sustainability of dividends. Therefore, we should always check that the company has generated enough cash to be able to afford its dividend. Thankfully, dividend payments only made up 43% of the free cash flow it generated, which is a comfortable payout ratio.
It is gratifying to see that the dividend is covered by both earnings and cash flow. This generally suggests that the dividend will be sustainable as long as earnings don’t fall steeply.
Click here to see how much of their winnings Nippon AntennaLtd has paid out over the past 12 months.
JASDAQ: 6930 historic dividend March 25, 2021
Have profits and dividends grown?
Companies with steadily growing earnings per share generally make the best dividend stocks because it is usually easier for them to grow dividends per share. Investors love dividends. So if profits go down and the dividend goes down, expect a stock to sell heavily at the same time. Fortunately for readers, Nippon AntennaLtd’s earnings per share have increased 10% per year over the past five years. Nippon AntennaLtd pays out just over half of its profits, suggesting the company is struck a balance between reinvesting in growth and paying dividends. This is a sensible combination that could point to further dividend hikes in the future.
Another important way to measure a company’s dividend prospects is by measuring its historical dividend growth rate. Nippon AntennaLtd’s dividend payments per share have decreased an average of 1.7% per year over the past 10 years, which isn’t particularly inspiring.
The bottom line
Should investors buy Nippon AntennaLtd for the upcoming dividend? Nippon AntennaLtd’s growing earnings per share and conservative payout ratios make for a decent combination. We also love that it paid out a smaller percentage of its cash flow. There’s a lot to like about Nippon AntennaLtd, and we’d prefer to take a closer look.
With that in mind, while Nippon AntennaLtd is an attractive dividend, it’s worth knowing the risks associated with this stock. To aid this, we discovered 3 warning signs for Nippon AntennaLtd this is what you should know before investing in their stocks.
However, we wouldn’t recommend buying just the first dividend stock you see. Here’s a list of interesting dividend stocks with a yield greater than 2% and an upcoming dividend.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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