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

San ju San Financial Group,Inc.'s (TSE:7322) investors are due to receive a payment of ¥37.00 per share on 9th of December. This makes the dividend yield 4.4%, which is above the industry average.

View our latest analysis for San ju San Financial GroupInc

San ju San Financial GroupInc's Payment Expected To Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much.

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 do not necessarily guarantee future ones, but San ju San Financial GroupInc's payout ratio of 29% is a good sign for current shareholders as this means that earnings decently cover dividends.

Over the next year, EPS could expand by 7.7% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 28% by next year, which is in a pretty sustainable range.

San ju San Financial GroupInc 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 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. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.

The Dividend Has Growth Potential

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. San ju San Financial GroupInc has impressed us by growing EPS at 7.7% 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.

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. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for San ju San Financial GroupInc 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.