Tenox (TSE:1905) Has Announced A Dividend Of ¥26.00
Tenox Corporation (TSE:1905) has announced a dividend of ¥26.00 per share, payable on December 3rd, resulting in a dividend yield of 3.7%. The company's earnings cover the dividend, with projected earnings per share growth of 16.3% over the next year. Despite a history of dividend cuts, Tenox has shown a compound annual growth rate of 13% in dividends over the past decade. With a low payout ratio and growing earnings, Tenox is considered an attractive income stock, although potential investors should be aware of two warning signs.
Tenox Corporation's (TSE:1905) investors are due to receive a payment of ¥26.00 per share on 3rd of December. This takes the dividend yield to 3.7%, which shareholders will be pleased with.
AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.
Tenox's Future Dividend Projections Appear Well Covered By Earnings
If the payments aren't sustainable, a high yield for a few years won't matter that much. However, Tenox's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
Looking forward, earnings per share could rise by 16.3% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 32% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for Tenox
Dividend Volatility
The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was ¥16.00 in 2015, and the most recent fiscal year payment was ¥52.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. Tenox 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.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Tenox has grown earnings per share at 16% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Tenox's prospects of growing its dividend payments in the future.
Tenox Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 2 warning signs for Tenox that you should be aware of before investing. Is Tenox not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
