Hokuhoku Financial Group (TSE:8377) Has Affirmed Its Dividend Of ¥37.00

Hokuhoku Financial Group, Inc.'s (TSE:8377) investors are due to receive a payment of ¥37.00 per share on 28th of June. The dividend yield is 2.2% based on this payment, which is a little bit low compared to the other companies in the industry.

See our latest analysis for Hokuhoku Financial Group

Hokuhoku Financial Group's Payment Expected To Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Hokuhoku Financial Group has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Using data from its latest earnings report, Hokuhoku Financial Group's payout ratio sits at 17%, an extremely comfortable number that shows that it can pay its dividend.

Over the next year, EPS is forecast to fall by 21.7%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 21%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Hokuhoku Financial Group Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was ¥37.50, compared to the most recent full-year payment of ¥37.00. Payments have been decreasing at a very slow pace in this time period. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

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. It's encouraging to see that Hokuhoku Financial Group has been growing its earnings per share at 10% a year over the past five years. Hokuhoku Financial Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Hokuhoku Financial Group Looks Like A Great Dividend Stock

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. The earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Hokuhoku Financial Group that investors should take into consideration. Is Hokuhoku Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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