Sumitomo Mitsui Financial Group (TSE:8316) Will Pay A Larger Dividend Than Last Year At ¥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. The payment will take the dividend yield to 3.2%, which is in line with the 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 aren't too impressed by dividend yields unless they can be sustained over time.

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 36% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS is forecast to expand by 9.9%. If the dividend continues on this path, the future payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.

Sumitomo Mitsui Financial Group Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was ¥120.00 in 2014, and the most recent fiscal year payment was ¥330.00. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Sumitomo Mitsui Financial Group has impressed us by growing EPS at 15% per year over the past five years. Sumitomo Mitsui Financial Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Sumitomo Mitsui Financial Group's 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing 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.