The Japan Wool Textile Co., Ltd. (TSE:3201) has announced that it will pay a dividend of ¥17.00 per share on the 19th of August. This makes the dividend yield 3.0%, which is above the industry average.
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Japan Wool Textile’s Future Dividend Projections Appear Well Covered By Earnings
A big dividend yield for a few years doesn’t mean much if it can’t be sustained. However, Japan Wool Textile’s earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
Over the next year, EPS could expand by 7.7% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 31%, which is in the range that makes us comfortable with the sustainability of the dividend.
TSE:3201 Historic Dividend April 11th 2025
Check out our latest analysis for Japan Wool Textile
Japan Wool Textile Has A Solid Track Record
Even over a long history of paying dividends, the company’s distributions have been remarkably stable. The dividend has gone from an annual total of ¥18.00 in 2015 to the most recent total annual payment of ¥42.00. This implies that the company grew its distributions at a yearly rate of about 8.8% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
We Could See Japan Wool Textile’s Dividend Growing
Some investors will be chomping at the bit to buy some of the company’s stock based on its dividend history. Japan Wool Textile has seen EPS rising for the last five years, at 7.7% per annum. Japan Wool Textile definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Japan Wool Textile’s Dividend
Overall, a dividend increase is always good, and we think that Japan Wool Textile is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Japan Wool Textile stock. Is Japan Wool Textile not quite the opportunity you were looking for? Why not check out 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.
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