Miyazaki Bank (TSE:8393) Will Pay A Larger Dividend Than Last Year At ¥57.50

The board of The Miyazaki Bank, Ltd. (TSE:8393) has announced that it will be paying its dividend of ¥57.50 on the 10th of December, an increased payment from last year's comparable dividend. This takes the annual payment to 3.0% of the current stock price, which is about average for the industry.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Miyazaki Bank's stock price has increased by 31% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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Miyazaki Bank's Earnings Will Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time.

Miyazaki Bank has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Miyazaki Bank's payout ratio sits at 20%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, earnings per share could rise by 7.0% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 19% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Miyazaki Bank

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was ¥80.00 in 2015, and the most recent fiscal year payment was ¥115.00. This implies that the company grew its distributions at a yearly rate of about 3.7% over that duration. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

Miyazaki Bank Could Grow Its Dividend

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Miyazaki Bank has seen EPS rising for the last five years, at 7.0% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

In Summary

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 Miyazaki Bank that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.