Ogaki Kyoritsu Bank (TSE:8361) Has Announced A Dividend Of ¥45.00

The Ogaki Kyoritsu Bank, Ltd.'s (TSE:8361) investors are due to receive a payment of ¥45.00 per share on 10th of December. This takes the annual payment to 2.7% of the current stock price, which is about average for the industry.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Ogaki Kyoritsu Bank's stock price has increased by 37% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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Ogaki Kyoritsu Bank's Payment Expected To Have Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Having distributed dividends for at least 10 years, Ogaki Kyoritsu Bank has a long history of paying out a part of its earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 24% also shows that Ogaki Kyoritsu Bank is able to comfortably pay dividends.

Over the next year, EPS could expand by 30.5% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 20% by next year, which is in a pretty sustainable range.

See our latest analysis for Ogaki Kyoritsu Bank

Ogaki Kyoritsu Bank Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from ¥70.00 total annually to ¥90.00. This means that it has been growing its distributions at 2.5% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Ogaki Kyoritsu Bank has grown earnings per share at 31% 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.

Ogaki Kyoritsu Bank Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Ogaki Kyoritsu Bank 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Ogaki Kyoritsu Bank stock. 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.