Chugin Financial GroupInc (TSE:5832) Has Announced A Dividend Of ¥29.50

Chugin Financial Group,Inc. (TSE:5832) has announced that it will pay a dividend of ¥29.50 per share on the 27th of June. Despite the cut, the dividend yield of 3.5% will still be comparable to other companies in the industry.

Check out our latest analysis for Chugin Financial GroupInc

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

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Chugin Financial GroupInc has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 45%, which means that Chugin Financial GroupInc would be able to pay its last dividend without pressure on the balance sheet.

The next year is set to see EPS grow by 18.5%. If the dividend continues along recent trends, we estimate the future payout ratio will be 39%, which is in the range that makes us comfortable with the sustainability of the dividend.

Chugin Financial GroupInc Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the dividend has gone from ¥16.00 total annually to ¥56.00. This implies that the company grew its distributions at a yearly rate of about 13% 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.

We Could See Chugin Financial GroupInc's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Chugin Financial GroupInc has seen EPS rising for the last five years, at 9.9% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Chugin Financial GroupInc Looks Like A Great Dividend Stock

Overall, we think that Chugin Financial GroupInc could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. Reducing the amount it is paying as a dividend can protect the company's balance sheet, keeping the dividend sustainable for longer. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Chugin Financial GroupInc stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.