Concordia Financial Group (TSE:7186) Is Increasing Its Dividend To ¥14.00

Concordia Financial Group, Ltd. (TSE:7186) has announced that it will be increasing its dividend from last year's comparable payment on the 29th of May to ¥14.00. Based on this payment, the dividend yield for the company will be 2.9%, which is fairly typical for the industry.

Check out our latest analysis for Concordia Financial Group

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

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

Concordia Financial Group has a good history of paying out dividends, with its current track record at 8 years. Using data from its latest earnings report, Concordia Financial Group's payout ratio sits at 19%, an extremely comfortable number that shows that it can pay its dividend.

The next year is set to see EPS grow by 12.0%. If the dividend continues along recent trends, we estimate the future payout ratio will be 40%, which is in the range that makes us comfortable with the sustainability of the dividend.

Concordia Financial Group Is Still Building Its Track Record

It is great to see that Concordia Financial Group has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2016, the annual payment back then was ¥13.00, compared to the most recent full-year payment of ¥27.00. This means that it has been growing its distributions at 9.6% per annum over that time. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Concordia Financial Group has impressed us by growing EPS at 8.3% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Concordia Financial Group's Dividend

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

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for Concordia Financial Group for free with public analyst estimates for the company. Is Concordia Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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