Yamanashi Chuo BankLtd's (TSE:8360) Shareholders Will Receive A Bigger Dividend Than Last Year

The Yamanashi Chuo Bank,Ltd.'s (TSE:8360) dividend will be increasing from last year's payment of the same period to ¥32.00 on 5th of December. This will take the dividend yield to an attractive 4.0%, providing a nice boost to shareholder returns.

View our latest analysis for Yamanashi Chuo BankLtd

Yamanashi Chuo BankLtd's Earnings Will Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Having distributed dividends for at least 10 years, Yamanashi Chuo BankLtd has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Yamanashi Chuo BankLtd's payout ratio of 28% is a good sign as this means that earnings decently cover dividends.

If the trend of the last few years continues, EPS will grow by 6.9% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 30% by next year, which is in a pretty sustainable range.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of ¥30.00 in 2014 to the most recent total annual payment of ¥64.00. This means that it has been growing its distributions at 7.9% per annum 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.

We Could See Yamanashi Chuo BankLtd's Dividend Growing

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Yamanashi Chuo BankLtd has seen EPS rising for the last five years, at 6.9% 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.

In Summary

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Yamanashi Chuo BankLtd that investors should take into consideration. 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.