SECOM Co Ltd's Dividend Analysis

Breaking Down SECOM Co Ltd's Dividend Yield and Growth

As of today, SECOM Co Ltd currently has a 12-month trailing dividend yield of 1.50% and a 12-month forward dividend yield of 1.82%. The gap between these two figures suggests an expectation of increased dividend payments over the next 12 months. A forward yield above the trailing yield typically indicates that analysts or the company anticipate higher distributions ahead, which could be a positive signal for investors focused on growing income streams.

SECOM Co Ltd's dividend yield of 1.50% is near a 10-year low and underperforms approximately 79.5% of global competitors in the Business Services industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors seeking immediate high payouts. However, a low yield can also reflect a rising share price rather than weakening fundamentals, so context matters when interpreting this metric.

Over the past three years, SECOM Co Ltd's annual dividend growth rate was 2.60%. Extended to a five-year horizon, this rate increased to 3.10% per year. And over the past decade, SECOM Co Ltd's annual dividends per share growth rate stands at 3.80%. This steady, if modest, acceleration in growth suggests management has prioritized consistent annual increases over dramatic jumps, a pattern often favored by conservative investors.

Based on SECOM Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of SECOM Co Ltd stock as of today is approximately 1.75%. Yield on cost measures the annual dividend return relative to an investor's original purchase price, assuming reinvested dividends and growth over time. While 1.75% is not exceptional in absolute terms, it underscores the value of patience for long-term holders.

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2026-06-30, SECOM Co Ltd's dividend payout ratio is 0.36, meaning roughly 36% of earnings are paid out as dividends. This leaves ample room for reinvestment and provides a cushion against earnings volatility.

SECOM Co Ltd's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SECOM Co Ltd's profitability 8 out of 10 as of 2026-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability. This consistent earnings record supports the view that the dividend is well covered by underlying profits.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. SECOM Co Ltd's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. A high growth rank implies that the company is expanding its business and earnings at a pace that can support future dividend increases, which is critical for income investors who rely on rising payouts to offset inflation.

Revenue is the lifeblood of any company, and SECOM Co Ltd's revenue per share , combined with the 3-year revenue growth rate , indicates a strong revenue model. SECOM Co Ltd's revenue has increased by approximately 6.50% per year on average, a rate that outperforms approximately 50.82% of global competitors. This top-line expansion provides the foundation for continued dividend payments and potential increases.

The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, SECOM Co Ltd's earnings increased by approximately 6.80% per year on average, a rate that outperforms approximately 46.84% of global competitors. Rising earnings per share indicate that the company is becoming more efficient and profitable, which bodes well for future dividend capacity.

Lastly, the company's 5-year EBITDA growth rate of 8.40% outperforms approximately 44.09% of global competitors. EBITDA growth reflects improvements in operating cash flow before accounting for financing and accounting decisions, and a steady upward trend here reinforces the company's ability to fund dividends from operational strength rather than balance sheet adjustments.

Next Steps for Dividend-Focused Investors

SECOM Co Ltd's upcoming $0.37 per share dividend, with an ex-dividend date of 2026-09-29, continues a long-standing tradition of returning capital to shareholders that dates back to 2006. While the current trailing yield of 1.50% sits near a 10-year low and lags many industry peers, the forward yield of 1.82% and a five-year dividend growth rate of 3.10% suggest that income-oriented investors may find more value in the company's growth trajectory than in its immediate payout. A payout ratio of 0.36, a profitability rank of 8 out of 10, and a growth rank of 8 out of 10 collectively point to a dividend that is both well covered and supported by a expanding business. The company's consistent positive net income over the past decade and revenue growth of 6.50% per year further reinforce the sustainability of its distributions. For value investors, the key question is whether SECOM Co Ltd's modest yield and steady growth align with their income objectives, or whether the search for higher current yields should continue elsewhere.

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