Mitsubishi UFJ Financial Group (TSE:8306) Is 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. The payment will take the dividend yield to 3.3%, which is in line with the average for the industry.

Check out our latest analysis for Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group's Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Mitsubishi UFJ Financial Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Mitsubishi UFJ Financial Group's payout ratio of 37% is a good sign as this means that earnings decently cover dividends.

The next year is set to see EPS grow by 10.3%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 39% by next year, which is in a pretty sustainable range.

Mitsubishi UFJ Financial Group Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was ¥14.00, compared to the most recent full-year payment of ¥50.00. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Mitsubishi UFJ Financial Group has grown earnings per share at 13% per 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.

We Really Like Mitsubishi UFJ Financial Group's Dividend

Overall, a dividend increase is always good, and we think that Mitsubishi UFJ Financial Group is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 9 Mitsubishi UFJ Financial Group analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.