Kiyo Bank's (TSE:8370) Dividend Will Be ¥58.00

The board of The Kiyo Bank, Ltd. (TSE:8370) has announced that it will pay a dividend of ¥58.00 per share on the 5th of December. This will take the dividend yield to an attractive 3.9%, providing a nice boost to shareholder returns.

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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.

Having distributed dividends for at least 10 years, Kiyo Bank has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Kiyo Bank's payout ratio of 35% 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 18.4% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Kiyo Bank

Kiyo Bank Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was ¥35.00, compared to the most recent full-year payment of ¥116.00. This means that it has been growing its distributions at 13% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Kiyo Bank has seen EPS rising for the last five years, at 18% per annum. 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.

Kiyo Bank Looks Like A Great Dividend Stock

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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. See if management have their own wealth at stake, by checking insider shareholdings in Kiyo Bank stock. 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.