Hyakugo Bank (TSE:8368) Will Pay A Dividend Of ¥9.00

The board of The Hyakugo Bank, Ltd. (TSE:8368) has announced that it will pay a dividend of ¥9.00 per share on the 23rd of June. Although the dividend is now higher, the yield is only 2.5%, which is below the industry average.

View our latest analysis for Hyakugo Bank

Hyakugo Bank's Payment Expected To Have Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end.

Hyakugo Bank has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Hyakugo Bank's payout ratio sits at 10%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, earnings per share could rise by 7.7% 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 2015, the annual payment back then was ¥8.00, compared to the most recent full-year payment of ¥18.00. This means that it has been growing its distributions at 8.4% per annum 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

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Hyakugo Bank has grown earnings per share at 7.7% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Hyakugo Bank Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on Hyakugo Bank management tenure, salary, and performance. Is Hyakugo Bank not quite the opportunity you were looking for? Why not check out our selection of top 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.