TOKYO BASE Co.,Ltd. (TSE:3415) will increase its dividend from last year’s comparable payment on the 24th of April to ¥6.00. This makes the dividend yield about the same as the industry average at 1.3%.
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TOKYO BASELtd’s Payment Could Potentially Have Solid Earnings Coverage
Unless the payments are sustainable, the dividend yield doesn’t mean too much. However, prior to this announcement, TOKYO BASELtd was quite comfortably covering its dividend with earnings and it was paying more than 75% of its free cash flow to shareholders. The business is returning a large chunk of its cash to shareholders, which means it is not being used to grow the business.
Looking forward, earnings per share is forecast to rise by 16.6% over the next year. If the dividend continues on this path, the payout ratio could be 23% by next year, which we think can be pretty sustainable going forward.
TSE:3415 Historic Dividend December 10th 2025
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TOKYO BASELtd Is Still Building Its Track Record
The dividend hasn’t seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn’t that long in the grand scheme of things. The annual payment during the last 4 years was ¥2.00 in 2021, and the most recent fiscal year payment was ¥6.00. This works out to be a compound annual growth rate (CAGR) of approximately 32% a year over that time. TOKYO BASELtd has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
TOKYO BASELtd May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings have grown at around 2.9% a year for the past five years, which isn’t massive but still better than seeing them shrink. While growth may be thin on the ground, TOKYO BASELtd could always pay out a higher proportion of earnings to increase shareholder returns.
In Summary
In summary, while it’s always good to see the dividend being raised, we don’t think TOKYO BASELtd’s payments are rock solid. While TOKYO BASELtd is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We would probably look elsewhere for an income investment.
It’s important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we’ve identified 1 warning sign for TOKYO BASELtd that you should be aware of before investing. Is TOKYO BASELtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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