San-in Godo BankLtd's (TSE:8381) Dividend Will Be ¥24.00

The board of The San-in Godo Bank,Ltd. (TSE:8381) has announced that it will pay a dividend on the 23rd of June, with investors receiving ¥24.00 per share. Based on this payment, the dividend yield for the company will be 3.8%, which is fairly typical for the industry.

Check out our latest analysis for San-in Godo BankLtd

San-in Godo BankLtd's Earnings Will Easily Cover The Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

San-in Godo BankLtd has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but San-in Godo BankLtd's payout ratio of 37% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS could expand by 8.1% if recent trends continue. If the dividend continues along recent trends, we estimate the future payout ratio will be 41%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2014, the dividend has gone from ¥11.00 total annually to ¥48.00. This works out to be a compound annual growth rate (CAGR) of approximately 16% a year over that time. San-in Godo BankLtd has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

We Could See San-in Godo BankLtd's Dividend Growing

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. It's encouraging to see that San-in Godo BankLtd has been growing its earnings per share at 8.1% a 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.

San-in Godo BankLtd Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that San-in Godo BankLtd is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for San-in Godo BankLtd that investors need to be conscious of moving forward. Is San-in Godo BankLtd 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.