I'm worried about my retirement, so I started investing in stocks DAY 175 [Shareholder Returns ⑥ Lining up 3 years of cash from the stocks I own]
—Walking with Haru, Age 60 Investment Log Day 175— When you line up 3 years’ worth, you start to see things.
Yesterday, I looked into the cash flow of Sekisui Chemical.
Subtracting the cash used for investment activities from the cash generated by operating activities left about 9.2 billion yen. On the other hand, the dividends paid to the parent company’s shareholders were about 34.2 billion yen.
Looking at these numbers alone, it makes me a little worried.
But a company doesn’t end its activities every year. There are years with high capital investment, and years that generate a lot of cash.
“Haru-san, if I line up a few years, will I be able to understand their ability to continue paying dividends a bit better?”
🌱 “That’s right. Let’s check with the company you actually own, Satsuki-san.” —Haru
〈Comparing 3 years of Sekisui House〉
Sekisui House, which I own a little bit of through PayPay Securities.
It’s the company I compared with Sekisui Chemical’s shareholder return policy before.
This time, I’ll look at the three years from the fiscal year ending January 2024 to the fiscal year ending January 2026.
When I converted the numbers listed in the consolidated cash flow statement of the financial results summary into 100 million yen units and lined them up, this is what I got.
Fiscal year ending January 2024
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Operating cash flow: approx. 15.7 billion yen
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Investing cash flow: approx. -69.1 billion yen
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Dividends paid: approx. 76.9 billion yen
Fiscal year ending January 2025
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Operating cash flow: approx. 62.9 billion yen
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Investing cash flow: approx. -697.7 billion yen
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Dividend payments: approximately 83 billion yen
Fiscal year ending January 2026
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Operating cash flow: approximately 216.3 billion yen
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Investing cash flow: approximately -73.2 billion yen
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Dividend payments: approximately 92.7 billion yen
The source for these figures is Sekisui House’s consolidated financial results for each period. The dividend payment amount is the figure listed under cash flow from financing activities.
“Wow, the investing cash flow for the fiscal year ending January 2025 is a pretty large negative, isn’t it?”
🌱 “That’s right. But before judging based solely on the size of the negative, I’d like to check what it was used for.” — Haru
<There was a reason for the large negative>
Let’s look a little closer at the financial results for the fiscal year ending January 2025.
During this period, the company acquired the American homebuilder M.D.C. Holdings as a subsidiary.
Expenditures related to the acquisition of consolidated subsidiaries were approximately 557 billion yen.
This was one of the reasons why the investing cash flow became significantly negative.
“So they spent a large amount of money to buy a company.”
🌱 “Yes. I’d also like to see if it was an investment to grow the company and how it connected to subsequent performance.” — Haru
Investing cash flow is negative, so it’s a bad company.
I realized that I shouldn’t look at it in such a simple way.
So, how was the following year?
For the fiscal year ending January 2026, operating cash flow was approximately 216.3 billion yen. Investing cash flow was approximately -73.2 billion yen.
Combining the two, it resulted in a positive of approximately 143.2 billion yen.
The dividend payment for this period was approximately 92.7 billion yen. The difference between cash from operating activities and investing activities exceeded the dividend payment amount.
However, this is a one-year figure. It is not guaranteed that the same amount of cash will remain the following year.
〈How have dividends changed?〉
There is one more figure that concerns me.
It is Sekisui House’s annual dividend per share.
For the fiscal year ending January 2024, it was 123 yen.
For the fiscal year ending January 2025, it was 135 yen.
For the fiscal year ending January 2026, it was 144 yen.
Over three years, the dividends have increased.
“Even though the cash flow has changed significantly, the dividends are increasing, aren’t they?”
🌱”That’s right. In addition to looking at profits and cash flow, it’s important to also look at the company’s dividend policy.” – Haru
From the fiscal year ending January 2024 to the fiscal year ending January 2026, profit attributable to owners of the parent also increased to approximately 202.3 billion yen, 217.7 billion yen, and 232.1 billion yen, respectively.
Profits are increasing.
Dividends are also increasing.
But the cash flow is not the same every year.
When you line them up like this, you realize that you cannot judge the ability to continue paying dividends based on profit or cash flow alone.
〈Today’s Summary〉
What I learned today.
If you want to consider the ability to continue paying dividends, one year’s worth of figures is not enough.
Compare profits and cash flow over several years. If there is a large expenditure, investigate the reason for it. And, confirm what policy the company uses to determine dividends.
I am 65 years old and aiming for a monthly dividend income of 50,000 yen.
That is precisely why I want to be able to think for myself about whether those dividends are likely to continue, rather than just looking at the current dividend yield.
Looking at Sekisui House’s three-year performance, I feel like I’ve gotten a slight sense of the company’s movements behind the numbers.
Tomorrow, I want to look into another stock I own.
And I plan to organize what I’ve learned about shareholder returns in my own way.
I will continue tomorrow as well.
📚 Related articles for DAY175 are here
DAY174 [Shareholder Returns ⑤ Where does the money for dividends come from?]
DAY173 [Shareholder Returns ④ I found a company that uses DOE]
Reference Materials
・Sekisui House ‘Financial Results for the Fiscal Year Ending January 2025’ (Published March 6, 2025)
・Sekisui House ‘Financial Results for the Fiscal Year Ending January 2024’ (Published March 7, 2024)
* Amounts are approximate figures rounded to the nearest 100 million yen from consolidated financial results. Dividend payments are based on actual payments in the cash flow statement, and the timing of recognition differs from the annual dividend per share for each fiscal period.
* The sum of operating cash flow and investment cash flow is one simple method for calculating free cash flow. It does not guarantee the company’s future dividend continuity.
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