Resona Holdings (TSE:8308) Will Pay A Dividend Of ¥11.50

The board of Resona Holdings, Inc. (TSE:8308) has announced that it will pay a dividend on the 11th of June, with investors receiving ¥11.50 per share. Although the dividend is now higher, the yield is only 2.0%, which is below the industry average.

Check out our latest analysis for Resona Holdings

Resona Holdings' Dividend Forecasted To Be Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end.

Having distributed dividends for at least 10 years, Resona Holdings has a long history of paying out a part of its earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 24% also shows that Resona Holdings is able to comfortably pay dividends.

The next year is set to see EPS grow by 9.2%. 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.

Resona Holdings Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was ¥15.00, compared to the most recent full-year payment of ¥23.00. This means that it has been growing its distributions at 4.4% per annum over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Resona Holdings has seen EPS rising for the last five years, at 8.9% per annum. 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 Resona Holdings' Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 9 analysts we track are forecasting for Resona Holdings for free with public 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.