The board of Fast Fitness Japan Incorporated (TSE:7092) has announced that it will pay a dividend of ¥20.00 per share on the 22nd of December. The dividend yield will be 2.5% based on this payment which is still above the industry average.
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Fast Fitness Japan’s Projected Earnings Seem Likely To Cover Future Distributions
Impressive dividend yields are good, but this doesn’t matter much if the payments can’t be sustained. Prior to this announcement, Fast Fitness Japan’s dividend was only 39% of earnings, however it was paying out 155% of free cash flows. While the business may be attempting to set a balanced dividend policy, a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.
The next year is set to see EPS grow by 13.9%. If the dividend continues along recent trends, we estimate the payout ratio will be 50%, which is in the range that makes us comfortable with the sustainability of the dividend.
TSE:7092 Historic Dividend September 21st 2025
See our latest analysis for Fast Fitness Japan
Fast Fitness Japan’s Dividend Has Lacked Consistency
Looking back, the company hasn’t been paying the most consistent dividend, but with such a short dividend history it could be too early to draw solid conclusions. The annual payment during the last 4 years was ¥12.82 in 2021, and the most recent fiscal year payment was ¥45.00. This means that it has been growing its distributions at 37% per annum over that time. Fast Fitness Japan has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.
Dividend Growth May Be Hard To Achieve
With a relatively unstable dividend, it’s even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. However, Fast Fitness Japan’s EPS was effectively flat over the past five years, which could stop the company from paying more every year. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.
Our Thoughts On Fast Fitness Japan’s Dividend
In summary, while it’s good to see that the dividend hasn’t been cut, we are a bit cautious about Fast Fitness Japan’s payments, as there could be some issues with sustaining them into the future. While Fast Fitness Japan is earning enough to cover the payments, the cash flows are lacking. This company is not in the top tier of income providing stocks.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we’ve picked out 1 warning sign for Fast Fitness Japan that investors should take into consideration. 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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