Kiyo Bank (TSE:8370) Is Due To Pay A Dividend Of ¥58.00

The Kiyo Bank, Ltd. (TSE:8370) will pay a dividend of ¥58.00 on the 5th of December. This takes the dividend yield to 4.3%, which shareholders will be pleased with.

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Kiyo Bank's Earnings Will Easily Cover The Distributions

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. Based on Kiyo Bank's last earnings report, the payout ratio is at a decent 28%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next year, EPS could expand by 6.4% if recent trends continue. If the dividend continues on this path, the future payout ratio could be 44% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Kiyo Bank

Kiyo 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. The dividend has gone from an annual total of ¥35.00 in 2015 to the most recent total annual payment of ¥116.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

We Could See Kiyo Bank's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Kiyo Bank has grown earnings per share at 6.4% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Kiyo Bank's prospects of growing its dividend payments in the future.

We Really Like Kiyo Bank's Dividend

Overall, a dividend increase is always good, and we think that Kiyo Bank is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Kiyo Bank that investors need to be conscious of moving forward. 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.