The board of Tokyo Printing Ink Mfg. Co., Ltd. (TSE:4635) has announced that it will pay a dividend on the 3rd of December, with investors receiving ¥100.00 per share. This makes the dividend yield 3.2%, which is above the industry average.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Tokyo Printing Ink Mfg’s stock price has increased by 63% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
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Tokyo Printing Ink Mfg’s Payment Could Potentially Have Solid Earnings Coverage
Impressive dividend yields are good, but this doesn’t matter much if the payments can’t be sustained. Prior to this announcement, Tokyo Printing Ink Mfg’s dividend was only 34% of earnings, however it was paying out 422% of free cash flows. A cash payout ratio this high could put the dividend under pressure and force the company to reduce it in the future if it were to run into tough times.
Over the next year, EPS could expand by 20.4% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 35%, which is in the range that makes us comfortable with the sustainability of the dividend.
TSE:4635 Historic Dividend August 22nd 2025
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Tokyo Printing Ink Mfg Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the annual payment back then was ¥60.00, compared to the most recent full-year payment of ¥210.00. This means that it has been growing its distributions at 13% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company’s stock based on its dividend history. Tokyo Printing Ink Mfg has seen EPS rising for the last five years, at 20% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
Our Thoughts On Tokyo Printing Ink Mfg’s Dividend
Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We would be a touch cautious of relying on this stock primarily for the dividend income.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we’ve identified 2 warning signs for Tokyo Printing Ink Mfg that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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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