Kyushu Financial GroupInc (TSE:7180) Will Pay A Dividend Of ¥9.00

Kyushu Financial Group,Inc. (TSE:7180) will pay a dividend of ¥9.00 on the 2nd of December. This means the annual payment will be 1.9% of the current stock price, which is lower than the industry average.

Check out our latest analysis for Kyushu Financial GroupInc

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

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Kyushu Financial GroupInc has a good history of paying out dividends, with its current track record at 8 years. Past distributions do not necessarily guarantee future ones, but Kyushu Financial GroupInc's payout ratio of 27% is a good sign for current shareholders as this means that earnings decently cover dividends.

The next year is set to see EPS grow by 15.9%. If the dividend continues along recent trends, we estimate the future payout ratio will be 27%, which is in the range that makes us comfortable with the sustainability of the dividend.

Kyushu Financial GroupInc Doesn't Have A Long Payment History

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2016, the dividend has gone from ¥5.00 total annually to ¥18.00. This means that it has been growing its distributions at 17% per annum over that time. 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.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. Earnings have grown at around 4.4% a year for the past five years, which isn't massive but still better than seeing them shrink. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 2 warning signs for Kyushu Financial GroupInc that investors should take into consideration. Is Kyushu Financial GroupInc 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.

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