Fast Fitness Japan Co., Ltd. TSE 7092 announced that it will pay a dividend of 15 yen per share on June 10th. This means the annual payout is 2.6% of the current stock price, which is above the industry average.
Check out our latest analysis for Fast Fitness Japan.
Fast Fitness Japan’s profits easily cover distributions
Even if you can maintain a high dividend yield for several years, it doesn’t mean much if you can’t maintain it. Prior to this announcement, Fast Fitness Japan was generating enough revenue to easily cover its dividend. As a result, a large portion of the profits have been reinvested into the business.
EPS is expected to expand by 8.4% next year. If the dividend continues at this rate, the payout ratio could be 32% by next year, which we think is quite sustainable going forward.
Fast Fitness Japan’s dividend is inconsistent
Even in its short history, there have been dividend cuts. From 2021 onwards, the annual dividend total has increased from 12.82 yen to 25.00 yen. This means it has been increasing its distributions at a rate of 25% per year over that time. Despite rapid dividend growth over the past few years, we’ve also seen payments decline in the past, which makes us cautious.
Dividends are likely to increase
With a relatively unstable dividend, it’s even more important to see if earnings per share are growing. Fast Fitness Japan’s EPS has increased at an annual rate of 11% over the past five years. The low payout ratio and steady growth suggest the company is reinvesting well, and there is plenty of room for dividend growth over the long term.
Fast Fitness Japan seems like a high dividend stock.
Overall, we think this is a great return investment, and we think maintaining the dividend this year may have been a conservative choice. Distributions are easily covered by profits and also converted into cash flow. Considering all these factors, we think this has solid potential as a dividend stock.
Investors generally prefer companies with consistent and stable dividend policies over companies with irregular dividend policies. At the same time, there are other factors that readers should be aware of before pouring capital into stocks. For example, we chose 1 warning sign for Fast Fitness Japan Here’s what investors should know before putting money into this stock. Is Fast Fitness Japan the opportunity you’ve been looking for? Why not check it out? Selection of high dividend stocks.
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