Resona Holdings (TSE:8308) Is Due To Pay A Dividend Of ¥11.50

Resona Holdings, Inc. (TSE:8308) has announced that it will pay a dividend of ¥11.50 per share on the 11th of June. This takes the annual payment to 1.6% of the current stock price, which unfortunately is below what the industry is paying.

Resona Holdings' Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Resona Holdings has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Resona Holdings' latest earnings report puts its payout ratio at 24%, showing that the company can pay out its dividends comfortably.

The next year is set to see EPS grow by 10.0%. If the dividend continues along recent trends, we estimate the future payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for Resona Holdings

Resona Holdings Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the annual payment back then was ¥15.00, compared to the most recent full-year payment of ¥23.00. This implies that the company grew its distributions at a yearly rate of about 4.4% over that duration. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

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. We are encouraged to see that Resona Holdings has grown earnings per share at 8.9% per year over the past five years. Resona Holdings definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Resona Holdings 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. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 9 Resona Holdings analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Resona Holdings 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.