Sumitomo Mitsui Financial Group (TSE:8316) Has Announced That It Will Be Increasing Its Dividend To ¥165.00

The board of Sumitomo Mitsui Financial Group, Inc. (TSE:8316) has announced that it will be paying its dividend of ¥165.00 on the 2nd of December, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 3.0%.

Check out our latest analysis for Sumitomo Mitsui Financial Group

Sumitomo Mitsui Financial Group's Earnings Will Easily Cover The Distributions

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

Sumitomo Mitsui 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 Sumitomo Mitsui Financial Group's payout ratio of 41% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to rise by 12.0% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 43% by next year, which is in a pretty sustainable range.

Sumitomo Mitsui Financial Group Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of ¥110.00 in 2014 to the most recent total annual payment of ¥330.00. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. 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

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Sumitomo Mitsui Financial Group has grown earnings per share at 11% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like Sumitomo Mitsui Financial Group's Dividend

Overall, a dividend increase is always good, and we think that Sumitomo Mitsui Financial Group is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. 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 Sumitomo Mitsui Financial Group for free with public analyst estimates for the company. Is Sumitomo Mitsui Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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