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

The Hyakugo Bank, Ltd. (TSE:8368) has announced that it will pay a dividend of ¥9.00 per share on the 23rd of June. This makes the dividend yield about the same as the industry average at 2.9%.

See our latest analysis for Hyakugo Bank

Hyakugo 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, Hyakugo Bank has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Hyakugo Bank's payout ratio of 26% 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 7.3% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 29%, 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. The annual payment during the last 10 years was ¥8.00 in 2014, and the most recent fiscal year payment was ¥18.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.4% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

We Could See Hyakugo Bank's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Hyakugo Bank has impressed us by growing EPS at 7.3% 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 this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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.