Kyushu Financial Group (TSE:7180) Is Increasing Its Dividend To ¥13.00

Kyushu Financial Group, Inc. (TSE:7180) has announced that it will be increasing its dividend from last year's comparable payment on the 2nd of December to ¥13.00. The payment will take the dividend yield to 2.8%, which is in line with the average for the industry.

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Kyushu Financial Group's Payment Expected To Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time.

Kyushu Financial Group has a good history of paying out dividends, with its current track record at 9 years. Based on Kyushu Financial Group's last earnings report, the payout ratio is at a decent 26%, 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 11.2%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 30% by next year, which is in a pretty sustainable range.

View our latest analysis for Kyushu Financial Group

Kyushu Financial Group Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. Since 2016, the annual payment back then was ¥5.00, compared to the most recent full-year payment of ¥26.00. This implies that the company grew its distributions at a yearly rate of about 20% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Kyushu Financial Group has grown earnings per share at 15% per year over the past five years. Kyushu Financial Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Kyushu Financial Group Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Kyushu Financial Group is a strong income stock thanks to its track record and growing earnings. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Kyushu Financial Group stock. Is Kyushu Financial Group not quite the opportunity you were looking for? Why not check out our selection of top 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.