Hyakugo Bank (TSE:8368) Is Due To Pay A Dividend Of ¥8.00

The board of The Hyakugo Bank, Ltd. (TSE:8368) has announced that it will pay a dividend on the 9th of December, with investors receiving ¥8.00 per share. Based on this payment, the dividend yield will be 3.0%, which is fairly typical for the industry.

Check out our latest analysis for Hyakugo Bank

Hyakugo Bank's Payment Expected To Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time.

Hyakugo Bank has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Hyakugo Bank's latest earnings report puts its payout ratio at 24%, showing that the company can pay out its dividends comfortably.

Looking forward, earnings per share could rise by 4.7% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 26%, which is in the range that makes us comfortable with the sustainability of the dividend.

Hyakugo Bank Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was ¥8.00, compared to the most recent full-year payment of ¥16.00. This works out to be a compound annual growth rate (CAGR) of approximately 7.2% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

Hyakugo Bank May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings per share has been crawling upwards at 4.7% per year. If Hyakugo Bank is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

We Really Like Hyakugo Bank's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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. 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. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in Hyakugo Bank in our latest insider ownership analysis. 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.