Shizuoka Financial GroupInc (TSE:5831) Is Paying Out A Larger Dividend Than Last Year

Shizuoka Financial Group,Inc. (TSE:5831) will increase its dividend from last year's comparable payment on the 19th of June to ¥22.00. Despite this raise, the dividend yield of 2.4% is only a modest boost to shareholder returns.

Check out our latest analysis for Shizuoka Financial GroupInc

Shizuoka Financial GroupInc's Earnings Will Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end.

Shizuoka Financial GroupInc has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Shizuoka Financial GroupInc's latest earnings report puts its payout ratio at 18%, showing that the company can pay out its dividends comfortably.

The next year is set to see EPS grow by 26.3%. If the dividend continues on this path, the future payout ratio could be 33% by next year, which we think can be pretty sustainable going forward.

Shizuoka Financial GroupInc Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of ¥15.00 in 2014 to the most recent total annual payment of ¥34.00. This implies that the company grew its distributions at a yearly rate of about 8.5% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. Earnings have grown at around 3.7% a year for the past five years, which isn't massive but still better than seeing them shrink. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.

Shizuoka Financial GroupInc Looks Like A Great Dividend Stock

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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Shizuoka Financial GroupInc that investors need to be conscious of moving forward. 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.