Yamanashi Chuo BankLtd (TSE:8360) Has Announced A Dividend Of ¥59.00

The board of The Yamanashi Chuo Bank,Ltd. (TSE:8360) has announced that it will pay a dividend of ¥59.00 per share on the 26th of June. Based on this payment, the dividend yield for the company will be 3.0%, which is fairly typical for the industry.

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

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Yamanashi Chuo BankLtd 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 Yamanashi Chuo BankLtd's payout ratio of 26% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS could expand by 28.0% if recent trends continue. If the dividend continues along recent trends, we estimate the future payout ratio will be 33%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Yamanashi Chuo BankLtd

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was ¥35.00 in 2015, and the most recent fiscal year payment was ¥118.00. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. We are encouraged to see that Yamanashi Chuo BankLtd has grown earnings per share at 28% per year over the past five years. 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 Yamanashi Chuo BankLtd'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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. 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. Is Yamanashi Chuo BankLtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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