Shizuoka Financial GroupInc's (TSE:5831) Upcoming Dividend Will Be Larger Than Last Year's

Shizuoka Financial Group,Inc. (TSE:5831) has announced that it will be increasing its dividend from last year's comparable payment on the 9th of December to ¥24.00. This will take the dividend yield to an attractive 4.0%, providing a nice boost to shareholder returns.

View our latest analysis for Shizuoka Financial GroupInc

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

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Shizuoka Financial GroupInc has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Shizuoka Financial GroupInc's last earnings report, the payout ratio is at a decent 35%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next year, EPS is forecast to expand by 8.7%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 39% by next year, which is in a pretty sustainable range.

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. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Shizuoka Financial GroupInc has been growing its earnings per share at 10% a year over the past five years. Shizuoka Financial GroupInc definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Shizuoka Financial GroupInc that you should be aware of before investing. 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.