■Shareholder return policy
The equity ratio of Nagai Leven ＜7447＞ is as high as 91.2% (end of fiscal year 2023/8), and financial details are stable. Furthermore, considering the company's business type, it is unlikely that profits will deteriorate rapidly, and it is expected that earnings will continue to stabilize. As a result of these, when there is little allocation (shareholder return) to outside the company, profits retained each year will accumulate into equity capital, and the net return on equity (ROE) will decline, in other words, capital efficiency will decline. However, in addition to increasing dividends commensurate with profit growth, the company is actively carrying out comprehensive shareholder returns, including the acquisition of treasury shares, thereby maintaining a high ROE (7.5% for the fiscal year ending 2023/8).
Since the company has pledged a dividend payout ratio of 50% or more on a standalone basis, the annual dividend was increased from 50.0 yen up until then to 60.0 yen in the 2017/8 fiscal year, an annual dividend of 60.0 yen was implemented from the 2018/8 fiscal year to the 2023/8 fiscal year, and an annual dividend of 60.0 yen is also planned for the 2024/8 fiscal year. Additionally, with the aim of implementing a flexible capital policy in response to improvements in capital efficiency and changes in the business environment, treasury stock acquisition of 612,700 shares (1,231 million yen) and treasury stock cancellation of 2,500,000 shares were carried out in the 2022/8 fiscal year. Furthermore, between 2023/6/30 and 12/11 of the same year, treasury shares of 454,300 shares (999 million yen) have already been acquired, and in addition to this, it has now been announced that an upper limit of 500,000 shares (same 1,000 million yen) will be purchased between 2024/4/3 and 9/30 of the same year.
The total return ratio (weighted average*) of the past 10 years (fiscal year ending 2014/8 to the fiscal year ending 2023/8) combined with share acquisitions is 71.1%, and in addition to a strong financial position, it can be said that such an aggressive attitude of shareholder return is worthy of evaluation.
*Weighted average return ratio = (sum of dividend amounts+sum of share repurchases) ÷ (sum of net income)
(Written by FISCO Visiting Analyst Noboru Terashima)