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 Future Dividend Projections Appear Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable. But before making this announcement, TOKYO BASELtd’s earnings quite easily covered the dividend. However, with more than 75% of free cash flow being paid out to shareholders, future growth could potentially be constrained.
Over the next year, EPS is forecast to expand by 16.0%. If the dividend continues on this path, the payout ratio could be 21% by next year, which we think can be pretty sustainable going forward.
TSE:3415 Historic Dividend January 7th 2026
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TOKYO BASELtd Is Still Building Its Track Record
The dividend has been pretty stable looking back, but the company hasn’t been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The annual payment during the last 4 years was ¥2.00 in 2022, and the most recent fiscal year payment was ¥6.00. This implies that the company grew its distributions at a yearly rate of about 32% over that duration. The dividend has been growing rapidly, however with such a short payment history we can’t know for sure if payment can continue to grow over the long term, so caution may be warranted.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that TOKYO BASELtd has grown earnings per share at 28% per year over the past five years. 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 BASELtd’s Dividend
In summary, while it’s always good to see the dividend being raised, we don’t think TOKYO BASELtd’s payments are rock solid. The company hasn’t been paying a very consistent dividend over time, despite only paying out a small portion of earnings. Overall, we don’t think this company has the makings of a good income stock.
It’s important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we’ve picked out 2 warning signs for TOKYO BASELtd that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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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