Hyakugo Bank (TSE:8368) Is Paying Out A Dividend Of ¥8.00

The Hyakugo Bank, Ltd. (TSE:8368) has announced that it will pay a dividend of ¥8.00 per share on the 9th of December. Including this payment, the dividend yield on the stock will be 2.4%, which is a modest boost for shareholders' returns.

See our latest analysis for Hyakugo Bank

Hyakugo Bank's Payment Expected To Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Hyakugo Bank has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Hyakugo Bank's payout ratio of 32% 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 6.0% over the next 12 months. 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

The company has an extended history of paying stable dividends. 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. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

We Could See Hyakugo Bank's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Hyakugo Bank has impressed us by growing EPS at 6.0% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Hyakugo Bank's prospects of growing its dividend payments in the future.

Hyakugo Bank Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Hyakugo Bank stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.

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