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 ¥16.00 on 29th of May. This makes the dividend yield about the same as the industry average at 2.8%.

See 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 9 years. Taking data from its last earnings report, calculating for the company's payout ratio of 38%shows that Concordia Financial Group would be able to pay its last dividend without pressure on the balance sheet.

The next year is set to see EPS grow by 13.0%. If the dividend continues on this path, the future payout ratio could be 42% by next year, which we think can be pretty sustainable going forward.

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. The dividend has gone from an annual total of ¥13.00 in 2016 to the most recent total annual payment of ¥27.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.5% a year 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 Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Concordia Financial Group has grown earnings per share at 11% per year over the past five years. Concordia Financial Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Concordia Financial Group's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 7 Concordia Financial Group analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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