Shizuoka Financial GroupInc (TSE:5831) Is Increasing Its Dividend To ¥24.00

The board of Shizuoka Financial Group,Inc. (TSE:5831) has announced that it will be paying its dividend of ¥24.00 on the 9th of December, an increased payment from last year's comparable dividend. The payment will take the dividend yield to 3.2%, which is in line with the average for the industry.

View our latest analysis for Shizuoka Financial GroupInc

Shizuoka Financial GroupInc's Payment Expected To Have Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Shizuoka Financial GroupInc has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Shizuoka Financial GroupInc's payout ratio of 37% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS is forecast to expand by 8.4%. If the dividend continues along recent trends, we estimate the future payout ratio will be 42%, which is in the range that makes us comfortable with the sustainability of the dividend.

Shizuoka Financial GroupInc Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ¥15.00 in 2014, and the most recent fiscal year payment was ¥48.00. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Shizuoka Financial GroupInc has seen EPS rising for the last five years, at 5.8% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Shizuoka Financial GroupInc's Dividend

Overall, a dividend increase is always good, and we think that Shizuoka Financial GroupInc is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Shizuoka Financial GroupInc that investors should take into consideration. Is Shizuoka Financial GroupInc not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.

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