Mitsubishi UFJ Financial Group (TSE:8306) Has Announced That It Will Be Increasing Its Dividend To ¥25.00

Mitsubishi UFJ Financial Group, Inc.'s (TSE:8306) dividend will be increasing from last year's payment of the same period to ¥25.00 on 5th of December. Based on this payment, the dividend yield for the company will be 3.0%, which is fairly typical for the industry.

View our latest analysis for Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group's Payment Expected To Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Mitsubishi UFJ Financial Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Mitsubishi UFJ Financial Group's last earnings report, the payout ratio is at a decent 33%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next year is set to see EPS grow by 7.6%. If the dividend continues on this path, the future payout ratio could be 36% by next year, which we think can be pretty sustainable going forward.

Mitsubishi UFJ Financial Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was ¥14.00, compared to the most recent full-year payment of ¥50.00. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Mitsubishi UFJ Financial Group has been growing its earnings per share at 18% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Mitsubishi UFJ Financial Group's prospects of growing its dividend payments in the future.

Mitsubishi UFJ Financial Group Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 10 analysts we track are forecasting for Mitsubishi UFJ Financial Group for free with public analyst estimates for the company. Is Mitsubishi UFJ Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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