Mebuki Financial GroupInc (TSE:7167) Is Increasing Its Dividend To ¥12.00

Mebuki Financial Group,Inc. (TSE:7167) will increase its dividend from last year's comparable payment on the 3rd of December to ¥12.00. Based on this payment, the dividend yield for the company will be 2.9%, which is fairly typical for the industry.

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Mebuki Financial GroupInc's Earnings Will Easily Cover The Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Mebuki Financial GroupInc has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Mebuki Financial GroupInc's last earnings report, the payout ratio is at a decent 27%, 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 15.2%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 31% by next year, which is in a pretty sustainable range.

View our latest analysis for Mebuki Financial GroupInc

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the annual payment back then was ¥9.4, compared to the most recent full-year payment of ¥24.00. This means that it has been growing its distributions at 9.8% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Mebuki Financial GroupInc might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Mebuki Financial GroupInc has impressed us by growing EPS at 15% per year over the past five years. Mebuki Financial GroupInc definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

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

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Mebuki Financial GroupInc that investors should take into consideration. 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.