Mebuki Financial GroupInc's (TSE:7167) Dividend Will Be ¥6.00

Mebuki Financial Group,Inc. (TSE:7167) will pay a dividend of ¥6.00 on the 3rd of June. This makes the dividend yield about the same as the industry average at 2.6%.

See our latest analysis for Mebuki Financial GroupInc

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

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Mebuki Financial GroupInc has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Mebuki Financial GroupInc's payout ratio sits at 18%, an extremely comfortable number that shows that it can pay its dividend.

The next year is set to see EPS grow by 74.4%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 22% by next year, which is in a pretty sustainable range.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The dividend has gone from an annual total of ¥7.69 in 2014 to the most recent total annual payment of ¥12.00. This means that it has been growing its distributions at 4.5% per annum over that time. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

Mebuki Financial GroupInc May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Over the past five years, it looks as though Mebuki Financial GroupInc's EPS has declined at around 2.1% a year. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.

Our Thoughts On Mebuki Financial GroupInc's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Mebuki Financial GroupInc has been making. We don't think Mebuki Financial GroupInc is a great stock to add to your portfolio if income is your focus.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Mebuki Financial GroupInc that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.