Yamanashi Chuo BankLtd (TSE:8360) Has Announced A Dividend Of ¥25.00

The Yamanashi Chuo Bank,Ltd. (TSE:8360) has announced that it will pay a dividend of ¥25.00 per share on the 28th of June. This means that the annual payment will be 2.9% of the current stock price, which is in line with the average for the industry.

View our latest analysis for Yamanashi Chuo BankLtd

Yamanashi Chuo BankLtd's Payment Expected To Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time.

Yamanashi Chuo BankLtd has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Yamanashi Chuo BankLtd's payout ratio sits at 15%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, earnings per share could rise by 0.4% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 30% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was ¥30.00 in 2014, and the most recent fiscal year payment was ¥50.00. This works out to be a compound annual growth rate (CAGR) of approximately 5.2% a year over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

Dividend Growth May Be Hard To Achieve

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Unfortunately, Yamanashi Chuo BankLtd's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. While EPS growth is quite low, Yamanashi Chuo BankLtd has the option to increase the payout ratio to return more cash to shareholders.

Our Thoughts On Yamanashi Chuo BankLtd's Dividend

Overall, a consistent dividend is a good thing, and we think that Yamanashi Chuo BankLtd has the ability to continue this into the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Yamanashi Chuo BankLtd that investors need to be conscious of moving forward. 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.