Tsukuba Bank (TSE:8338) Has Affirmed Its Dividend Of ¥5.00

The board of Tsukuba Bank, Ltd. (TSE:8338) has announced that it will pay a dividend of ¥5.00 per share on the 8th of June. This means the annual payment will be 1.4% of the current stock price, which is lower than the industry average.

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Tsukuba Bank's Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Tsukuba Bank has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past records don't necessarily translate into future results, the company's payout ratio of 6.9% also shows that Tsukuba Bank is able to comfortably pay dividends.

Over the next year, EPS could expand by 31.6% if recent trends continue. If the dividend continues on this path, the future payout ratio could be 5.3% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Tsukuba Bank

Tsukuba Bank Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. There hasn't been much of a change in the dividend over the last 10 years. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Tsukuba Bank has seen EPS rising for the last five years, at 32% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

We Really Like Tsukuba Bank's Dividend

Overall, we like to see the dividend staying consistent, and we think Tsukuba Bank might even raise payments in the future. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Tsukuba Bank that investors should take into consideration. Is Tsukuba 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.