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. This takes the annual payment to 3.7% of the current stock price, which is about 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

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

San ju San Financial GroupInc has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. Despite this history however, San ju San Financial GroupInc's latest earnings report actually shows that the company didn't have enough earnings to cover its dividends, paying out more than it earned. 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.

EPS is set to fall by 33.2% over the next 12 months if recent trends continue. If the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 38%, which is definitely feasible to continue.

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. Its dividends have grown at less than 1% per annum over this time frame. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

The Dividend Has Limited Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. Unfortunately things aren't as good as they seem. San ju San Financial GroupInc's EPS has fallen by approximately 33% per year during the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into 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. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. This company is not in the top tier of income providing stocks.

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 is significant!) 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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