Sumitomo Mitsui Financial Group, Inc. (TSE:8316) Looks Interesting, And It's About To Pay A Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Sumitomo Mitsui Financial Group, Inc. (TSE:8316) is about to go ex-dividend in just two days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Sumitomo Mitsui Financial Group's shares on or after the 28th of March will not receive the dividend, which will be paid on the 1st of July.

The company's next dividend payment will be JP¥135.00 per share, and in the last 12 months, the company paid a total of JP¥270 per share. Looking at the last 12 months of distributions, Sumitomo Mitsui Financial Group has a trailing yield of approximately 3.0% on its current stock price of JP¥9095.00. If you buy this business for its dividend, you should have an idea of whether Sumitomo Mitsui Financial Group's dividend is reliable and sustainable. So we need to investigate whether Sumitomo Mitsui Financial Group can afford its dividend, and if the dividend could grow.

See our latest analysis for Sumitomo Mitsui 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. Sumitomo Mitsui Financial Group paid out a comfortable 37% of its profit last year.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Sumitomo Mitsui Financial Group, with earnings per share up 5.8% on average over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Sumitomo Mitsui Financial Group has lifted its dividend by approximately 9.4% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Has Sumitomo Mitsui Financial Group got what it takes to maintain its dividend payments? Sumitomo Mitsui Financial Group has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. In summary, Sumitomo Mitsui Financial Group appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

Curious what other investors think of Sumitomo Mitsui Financial Group? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.