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

The board of Chugin Financial Group,Inc. (TSE:5832) has announced that it will be paying its dividend of ¥37.00 on the 9th of December, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 3.5%.

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

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

Having distributed dividends for at least 10 years, Chugin Financial GroupInc has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 40%, 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 16.8%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 44% by next year, which is in a pretty sustainable range.

See 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. Since 2015, the annual payment back then was ¥18.00, compared to the most recent full-year payment of ¥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

Investors could be attracted to the stock based on the quality of its payment history. Chugin Financial GroupInc has seen EPS rising for the last five years, at 20% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Chugin Financial GroupInc Looks Like A Great Dividend Stock

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 of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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.