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

Yokohama Financial Group, Inc.'s (TSE:7186) dividend will be increasing from last year's payment of the same period to ¥20.00 on 28th of May. This makes the dividend yield about the same as the industry average at 3.3%.

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Yokohama Financial Group's Earnings Will Easily Cover The Distributions

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

Having paid out dividends for 9 years, Yokohama Financial Group has a good history of paying out a part of its earnings to shareholders. Based on Yokohama Financial Group's last earnings report, the payout ratio is at a decent 40%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share is forecast to rise by 12.0% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 44%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Yokohama Financial Group

Yokohama Financial Group Doesn't Have A Long Payment History

Yokohama Financial Group's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2016, the annual payment back then was ¥13.00, compared to the most recent full-year payment of ¥40.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. 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. Yokohama Financial Group has seen EPS rising for the last five years, at 20% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

We Really Like Yokohama Financial Group's Dividend

Overall, a dividend increase is always good, and we think that Yokohama 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for Yokohama Financial Group for free with public analyst estimates for the company. Is Yokohama Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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