Concordia Financial Group (TSE:7186) Is Paying Out A Larger Dividend Than Last Year

Concordia Financial Group, Ltd.'s (TSE:7186) dividend will be increasing from last year's payment of the same period to ¥13.00 on 2nd of December. The payment will take the dividend yield to 3.3%, which is in line with the average for the industry.

Check out our latest analysis for Concordia Financial Group

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

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Concordia Financial Group has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Concordia Financial Group's payout ratio of 39% 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 13.0%. 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 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 ¥13.00 total annually to ¥26.00. This means that it has been growing its distributions at 9.1% per annum over that time. Concordia Financial Group has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.

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 6.4% 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.

Our Thoughts On Concordia Financial Group's Dividend

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Concordia Financial Group that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.