Tokyo Kiraboshi Financial Group (TSE:7173) Is Due To Pay A Dividend Of ¥85.00

Tokyo Kiraboshi Financial Group, Inc. (TSE:7173) will pay a dividend of ¥85.00 on the 3rd of December. The payment will take the dividend yield to 2.5%, which is in line with the average for the industry.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Tokyo Kiraboshi Financial Group's stock price has increased by 35% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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Tokyo Kiraboshi Financial Group's Payment Expected To Have Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Having distributed dividends for at least 10 years, Tokyo Kiraboshi Financial Group has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Tokyo Kiraboshi Financial Group's latest earnings report puts its payout ratio at 17%, showing that the company can pay out its dividends comfortably.

Over the next year, EPS could expand by 33.5% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 14% by next year, which is in a pretty sustainable range.

View our latest analysis for Tokyo Kiraboshi Financial Group

Tokyo Kiraboshi Financial Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥60.00 total annually to ¥170.00. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

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. We are encouraged to see that Tokyo Kiraboshi Financial Group has grown earnings per share at 34% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like Tokyo Kiraboshi Financial Group's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Tokyo Kiraboshi Financial Group 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.