Concordia Financial Group's (TSE:7186) Shareholders Will Receive A Bigger Dividend Than Last Year

Concordia Financial Group, Ltd. (TSE:7186) has announced that it will be increasing its dividend from last year's comparable payment on the 2nd of December to ¥17.00. Based on this payment, the dividend yield for the company will be 3.6%, which is fairly typical for the industry.

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Concordia Financial Group's Earnings Will Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Having paid out dividends for 9 years, Concordia Financial Group has a good history of paying out a part of its earnings to shareholders. 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 12.6%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 44% by next year, which is in a pretty sustainable range.

See our latest analysis for Concordia Financial Group

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 annual payment back then was ¥13.00, compared to the most recent full-year payment of ¥34.00. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. 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.

The Dividend Looks Likely To Grow

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 14% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. 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. 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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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.