San ju San Financial GroupInc (TSE:7322) Has Announced That It Will Be Increasing Its Dividend To ¥57.00

San ju San Financial Group,Inc. (TSE:7322) will increase its dividend from last year's comparable payment on the 24th of June to ¥57.00. This makes the dividend yield 4.1%, which is above the industry average.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that San ju San Financial GroupInc's stock price has increased by 37% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

Check out 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.

San ju San Financial GroupInc has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 27%shows that San ju San Financial GroupInc would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share could rise by 9.4% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 29%, which is in the range that makes us comfortable with the sustainability of the dividend.

San ju San Financial GroupInc Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. Since 2018, the annual payment back then was ¥72.00, compared to the most recent full-year payment of ¥94.00. This implies that the company grew its distributions at a yearly rate of about 4.5% over that duration. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

We Could See San ju San Financial GroupInc's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. San ju San Financial GroupInc has impressed us by growing EPS at 9.4% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like San ju San Financial GroupInc's Dividend

Overall, a dividend increase is always good, and we think that San ju San Financial GroupInc 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. See if management have their own wealth at stake, by checking insider shareholdings in San ju San Financial GroupInc stock. Is San ju San Financial GroupInc 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.