Shiga Bank (TSE:8366) Is Due To Pay A Dividend Of ¥40.00

The Shiga Bank, Ltd.'s (TSE:8366) investors are due to receive a payment of ¥40.00 per share on 28th of June. This payment means the dividend yield will be 1.9%, which is below the average for the industry.

See our latest analysis for Shiga Bank

Shiga Bank's Earnings Will Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Shiga Bank 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 21% also shows that Shiga Bank is able to comfortably pay dividends.

Over the next year, EPS is forecast to expand by 5.5%. If the dividend continues along recent trends, we estimate the future payout ratio will be 24%, which is in the range that makes us comfortable with the sustainability of the dividend.

Shiga Bank Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from ¥30.00 total annually to ¥80.00. This means that it has been growing its distributions at 10% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Shiga Bank Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Shiga Bank has grown earnings per share at 7.8% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Shiga Bank's prospects of growing its dividend payments in the future.

Shiga Bank Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Shiga Bank might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Shiga 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.