Kiyo Bank (TSE:8370) Is Due To Pay A Dividend Of ¥45.00

The Kiyo Bank, Ltd. (TSE:8370) has announced that it will pay a dividend of ¥45.00 per share on the 30th of June. This takes the dividend yield to 3.8%, which shareholders will be pleased with.

Check out our latest analysis for Kiyo Bank

Kiyo Bank's Dividend Forecasted To Be Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Kiyo 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 Kiyo Bank's payout ratio of 28% 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 1.3% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 37% by next year, which is in a pretty sustainable range.

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Kiyo 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 dividend has gone from ¥30.00 total annually to ¥90.00. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend's Growth Prospects Are Limited

The company's investors will be pleased to have been receiving dividend income for some time. However, Kiyo Bank's EPS was effectively flat over the past five years, which could stop the company from paying more every year. While growth may be thin on the ground, Kiyo Bank could always pay out a higher proportion of earnings to increase shareholder returns.

Kiyo 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. 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. As an example, we've identified 1 warning sign for Kiyo Bank that you should be aware of before investing. Is Kiyo 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.