Corona's (TSE:5909) Dividend Will Be ¥14.00
Corona Corporation (TSE:5909) will pay a dividend of ¥14.00 on December 3rd, yielding 3.0%. Despite a solid track record of consistent payments, concerns arise over the sustainability of this high payout, as earnings have been lower than dividends. The estimated payout ratio could reach 91%, indicating potential pressure on the balance sheet. While EPS is projected to grow by 18.9% next year, the company’s reinvestment is low, suggesting slower growth ahead. Overall, the current dividend level may be unsustainable, raising doubts about its reliability as an income stock.
Corona Corporation (TSE:5909) will pay a dividend of ¥14.00 on the 3rd of December. The dividend yield will be 3.0% based on this payment which is still above the industry average.
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Corona's Future Dividend Projections Appear Well Covered By Earnings
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, earnings were actually smaller than the dividend, and the company was actually spending more cash than it was making. This high of a dividend payment could start to put pressure on the balance sheet in the future.
EPS is set to grow by 18.9% over the next year if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio could reach 91%, which is on the higher side, but certainly still feasible.
See our latest analysis for Corona
Corona Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The last annual payment of ¥28.00 was flat on the annual payment from10 years ago. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
Corona Might Find It Hard To Grow Its Dividend
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Corona has been growing its earnings per share at 19% a year over the past five years. However, the company isn't reinvesting a lot back into the business, so we would expect the growth rate to slow down somewhat in the future.
The Dividend Could Prove To Be Unreliable
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. Overall, we don't think this company has the makings of a good income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 2 warning signs for Corona (of which 1 is a bit unpleasant!) you should know about. Is Corona not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
