SBI Global Asset Management Co., Ltd. (TSE:4765) stock is about to trade ex-dividend in three days. The ex-dividend date is one business day before a company’s record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase SBI Global Asset Management’s shares before the 28th of March in order to receive the dividend, which the company will pay on the 3rd of June.
The company’s upcoming dividend is JP¥13.00 a share, following on from the last 12 months, when the company distributed a total of JP¥18.25 per share to shareholders. Calculating the last year’s worth of payments shows that SBI Global Asset Management has a trailing yield of 2.3% on the current share price of JP¥777.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether SBI Global Asset Management can afford its dividend, and if the dividend could grow.
View our latest analysis for SBI Global Asset Management
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. That’s why it’s good to see SBI Global Asset Management paying out a modest 29% of its earnings.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit SBI Global Asset Management paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it’s easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That’s why it’s comforting to see SBI Global Asset Management’s earnings have been skyrocketing, up 36% per annum for the past five years.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. SBI Global Asset Management has delivered 19% dividend growth per year on average over the past 10 years. It’s great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
The Bottom Line
Is SBI Global Asset Management an attractive dividend stock, or better left on the shelf? Companies like SBI Global Asset Management that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term – as long as it’s done without issuing too many new shares. SBI Global Asset Management ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
In light of that, while SBI Global Asset Management has an appealing dividend, it’s worth knowing the risks involved with this stock. Our analysis shows 1 warning sign for SBI Global Asset Management and you should be aware of this before buying any shares.
If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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Find out whether SBI Global Asset Management is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.