Chugin Financial GroupInc (TSE:5832) Is Increasing Its Dividend To ¥37.00

Chugin Financial Group,Inc. (TSE:5832) has announced that it will be increasing its dividend from last year's comparable payment on the 9th of December to ¥37.00. This will take the annual payment to 4.1% of the stock price, which is above what most companies in the industry pay.

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Chugin Financial GroupInc's Dividend Forecasted To Be Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Chugin Financial GroupInc has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Chugin Financial GroupInc's last earnings report, the payout ratio is at a decent 45%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next year is set to see EPS grow by 15.5%. If the dividend continues along recent trends, we estimate the future payout ratio will be 44%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for Chugin Financial GroupInc

Chugin 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 ¥18.00 in 2015, and the most recent fiscal year payment was ¥74.00. This means that it has been growing its distributions at 15% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

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. Chugin Financial GroupInc has impressed us by growing EPS at 19% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like Chugin Financial GroupInc's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Chugin Financial GroupInc stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.