Sumitomo Mitsui Financial Group (TSE:8316) Is Increasing Its Dividend To ¥165.00

Sumitomo Mitsui Financial Group, Inc. (TSE:8316) has announced that it will be increasing its dividend from last year's comparable payment on the 2nd of December to ¥165.00. This takes the annual payment to 3.2% of the current stock price, which is about average for the industry.

Check out our latest analysis for Sumitomo Mitsui Financial Group

Sumitomo Mitsui Financial Group's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Sumitomo Mitsui Financial Group has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. 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.

Over the next year, EPS is forecast to expand by 11.8%. 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. Since 2014, the dividend has gone from ¥110.00 total annually to ¥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. Sumitomo Mitsui Financial Group has impressed us by growing EPS 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. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 9 Sumitomo Mitsui 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.

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