Income Investors Should Know That Daishi Hokuetsu Financial Group, Inc. (TSE:7327) Goes Ex-Dividend Soon

It looks like Daishi Hokuetsu Financial Group, Inc. (TSE:7327) is about to go ex-dividend in the next three days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Daishi Hokuetsu Financial Group's shares on or after the 27th of September, you won't be eligible to receive the dividend, when it is paid on the 2nd of December.

The company's next dividend payment will be JP¥90.00 per share, on the back of last year when the company paid a total of JP¥160 to shareholders. Based on the last year's worth of payments, Daishi Hokuetsu Financial Group has a trailing yield of 3.7% on the current stock price of JP¥4855.00. If you buy this business for its dividend, you should have an idea of whether Daishi Hokuetsu Financial Group's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Daishi Hokuetsu Financial Group

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That's why it's good to see Daishi Hokuetsu Financial Group paying out a modest 28% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Daishi Hokuetsu Financial Group paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Readers will understand then, why we're concerned to see Daishi Hokuetsu Financial Group's earnings per share have dropped 19% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Daishi Hokuetsu Financial Group has delivered an average of 8.4% per year annual increase in its dividend, based on the past five years of dividend payments.

To Sum It Up

Should investors buy Daishi Hokuetsu Financial Group for the upcoming dividend? Daishi Hokuetsu Financial Group's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.

If you're not too concerned about Daishi Hokuetsu Financial Group's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Every company has risks, and we've spotted 2 warning signs for Daishi Hokuetsu Financial Group you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full 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.