HASEKO (TSE:1808) Has Announced A Dividend Of ¥45.00
HASEKO Corporation (TSE:1808) has announced a dividend of ¥45.00 per share, yielding 3.7%, payable on December 8. Despite a history of dividend cuts, projected earnings are expected to rise by 12.3% next year, potentially allowing a sustainable payout ratio of 72%. However, concerns remain due to past earnings declines and lack of free cash flow, making future dividend reliability uncertain. Investors are advised to consider other factors and warning signs before investing in HASEKO.
HASEKO Corporation's (TSE:1808) investors are due to receive a payment of ¥45.00 per share on 8th of December. This takes the dividend yield to 3.7%, which shareholders will be pleased with.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
HASEKO's Projected Earnings Seem Likely To Cover Future Distributions
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Before making this announcement, HASEKO was earning enough to cover the dividend, but it wasn't generating any free cash flows. No cash flows could definitely make returning cash to shareholders difficult, or at least mean the balance sheet will come under pressure.
Looking forward, earnings per share is forecast to rise by 12.3% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 72% by next year, which is in a pretty sustainable range.
Check out our latest analysis for HASEKO
Dividend Volatility
Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2015, the annual payment back then was ¥10.00, compared to the most recent full-year payment of ¥90.00. This means that it has been growing its distributions at 25% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.
Dividend Growth Is Doubtful
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's not great to see that HASEKO's earnings per share has fallen at approximately 6.3% per year over the past five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
The Dividend Could Prove To Be Unreliable
In summary, while it's always good to see the dividend being raised, we don't think HASEKO's payments are rock solid. While HASEKO is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 4 warning signs for HASEKO (1 doesn't sit too well with us!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
