Rheon Automatic Machinery Co., Ltd.’s stock set to trade ex-dividend
Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend.
JAPAN – Rheon Automatic Machinery Co., Ltd., a Japanese company specializing in food machinery manufacturing, has announced to investors that its ex-dividend date is fast approaching, Simply Wall Street reports.
The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle.
For instance, if an investor purchases shares of Rheon Automatic Machinery on or after March 28th, they will not be eligible to receive the upcoming dividend, which will be paid on June 27th.
The company plans to distribute JP¥21.00 (US$ 0.14) per share, and in the past 12 months, it has paid a total of JP¥42.00 (US$0.28) per share.
Based on its current stock price of JP¥1307.00 (US$8.74), Rheon Automatic Machinery has a trailing yield of approximately 3.2%.
Dividends provide an essential source of income for many shareholders, but the health of the business is crucial for maintaining those dividends. If a company pays out more in dividends than it earns, the sustainability of the dividend may be at risk.
Rheon Automatic Machinery has a payout ratio of 34% of its earnings, which is considered modest and manageable. Additionally, the company distributed only 31% of its free cash flow as dividends, indicating a comfortable payout level for most companies.
The combination of profits and cash flow covering the dividend suggests that it is sustainable, provided earnings do not decline significantly.
Rheon Automatic Machinery has experienced steady growth, with earnings per share increasing by an average of 6.7% over the last five years. The company has been retaining more than half of its earnings for reinvestment, while also growing its earnings at a commendable rate.
Many investors evaluate a company’s dividend performance by looking at changes in dividend payments over time. Over the past decade, Rheon Automatic Machinery has increased its dividend by approximately 18% annually.
Founded in 1963, Rheon Automatic Machinery manufactures bakery and baking equipment, including filling machines and croissant-making machines, both of which hold a strong market share domestically. The company is headquartered in Utsunomiya City, Japan.
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