Hyakugo Bank's (TSE:8368) Dividend Will Be ¥7.00

The board of The Hyakugo Bank, Ltd. (TSE:8368) has announced that it will pay a dividend of ¥7.00 per share on the 24th of June. This means the annual payment will be 2.2% of the current stock price, which is lower than the industry average.

See our latest analysis for Hyakugo Bank

Hyakugo Bank's Payment Expected To Have Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive.

Having distributed dividends for at least 10 years, Hyakugo Bank has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 32%, which means that Hyakugo Bank would be able to pay its last dividend without pressure on the balance sheet.

If the trend of the last few years continues, EPS will grow by 11.1% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 23% by next year, which is in a pretty sustainable range.

Hyakugo Bank Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the annual payment back then was ¥7.50, compared to the most recent full-year payment of ¥14.00. This means that it has been growing its distributions at 6.4% per annum 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.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Hyakugo Bank has impressed us by growing EPS at 11% 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.

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.