Yamanashi Chuo BankLtd (TSE:8360) Is Due To Pay A Dividend Of ¥32.00

The Yamanashi Chuo Bank,Ltd. (TSE:8360) will pay a dividend of ¥32.00 on the 26th of June. This takes the annual payment to 3.5% of the current stock price, which is about average for the industry.

See our latest analysis for Yamanashi Chuo BankLtd

Yamanashi Chuo BankLtd's Earnings Will Easily Cover The Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Yamanashi Chuo BankLtd has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 16% also shows that Yamanashi Chuo BankLtd is able to comfortably pay dividends.

If the trend of the last few years continues, EPS will grow by 8.0% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 31% by next year, which is in a pretty sustainable range.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2014, the dividend has gone from ¥30.00 total annually to ¥64.00. This implies that the company grew its distributions at a yearly rate of about 7.9% over that duration. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.

The Dividend Has Growth Potential

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Yamanashi Chuo BankLtd has seen EPS rising for the last five years, at 8.0% per annum. Yamanashi Chuo BankLtd definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Yamanashi Chuo BankLtd's Dividend

Overall, a dividend increase is always good, and we think that Yamanashi Chuo BankLtd is a strong income stock thanks to its track record and growing earnings. 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 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. 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.