Concordia Financial Group's (TSE:7186) Dividend Will Be Increased To ¥13.00

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. This makes the dividend yield about the same as the industry average at 3.4%.

View our latest analysis for Concordia Financial Group

Concordia Financial Group's Earnings Will Easily Cover The Distributions

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

Concordia Financial Group has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 39%shows that Concordia Financial Group would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to expand by 10.3%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 41% by next year, which is in a pretty sustainable range.

Concordia Financial Group Is Still Building Its Track Record

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 implies that the company grew its distributions at a yearly rate of about 9.1% over that duration. Concordia Financial Group has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

Concordia Financial Group Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Concordia Financial Group has impressed us by growing EPS at 6.4% 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.

In Summary

Overall, this is a reasonable dividend, and it being raised is an added bonus. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Concordia Financial Group that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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.