San ju San Financial GroupInc (TSE:7322) Has Announced A Dividend Of ¥37.00

The board of San ju San Financial Group,Inc. (TSE:7322) has announced that it will pay a dividend of ¥37.00 per share on the 9th of December. The payment will take the dividend yield to 3.6%, which is in line with the average for the industry.

See our latest analysis for San ju San Financial GroupInc

San ju San Financial GroupInc's Dividend Forecasted To Be Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Having paid out dividends for 6 years, San ju San Financial GroupInc has a good history of paying out a part of its earnings to shareholders. Past distributions unfortunately do not guarantee future ones, and San ju San Financial GroupInc's last earnings report actually showed that the company went over its net earnings in its total dividend distribution. This value is at an alarming sign that could mean that San ju San Financial GroupInc's dividend at its current rate may no longer be sustainable for longer.

Looking forward, EPS could fall by 33.2% if the company can't turn things around from the last few years. If the dividend continues along recent trends, we estimate the future payout ratio could be 38%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

San ju San Financial GroupInc Doesn't Have A Long Payment History

San ju San Financial GroupInc'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 2018, the annual payment back then was ¥72.00, compared to the most recent full-year payment of ¥74.00. Dividend payments have been growing, but very slowly over the period. San ju San Financial GroupInc hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

The Dividend Has Limited Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. San ju San Financial GroupInc's EPS has fallen by approximately 33% per year during the past five years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

Our Thoughts On San ju San Financial GroupInc's Dividend

In summary, while it's always good to see the dividend being raised, we don't think San ju San Financial GroupInc's payments are rock solid. While San ju San Financial GroupInc is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We would probably look elsewhere for an income investment.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 2 warning signs for San ju San Financial GroupInc (1 doesn't sit too well with us!) 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.

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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.

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