The Gunma Bank, Ltd.'s (TSE:8334) investors are due to receive a payment of ¥20.00 per share on 23rd of June. This takes the annual payment to 3.7% of the current stock price, which is about average for the industry.
See our latest analysis for Gunma Bank
Gunma Bank'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.
Having distributed dividends for at least 10 years, Gunma Bank has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Gunma Bank's latest earnings report puts its payout ratio at 12%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to rise by 9.1% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 38%, which is in the range that makes us comfortable with the sustainability of the dividend.
Gunma Bank Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from ¥9.50 total annually to ¥40.00. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. 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
Investors could be attracted to the stock based on the quality of its payment history. Gunma Bank has seen EPS rising for the last five years, at 18% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Gunma Bank's prospects of growing its dividend payments in the future.
We Really Like Gunma Bank'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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Gunma Bank that investors should know about before committing capital to this stock. Is Gunma Bank 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.
About TSE:8334
Gunma Bank
Provides various banking and financial products and services in Japan.
Solid track record with excellent balance sheet and pays a dividend.
