Mizuho Financial Group's (TSE:8411) Upcoming Dividend Will Be Larger Than Last Year's

Mizuho Financial Group, Inc. (TSE:8411) will increase its dividend from last year's comparable payment on the 6th of December to ¥57.50. This will take the dividend yield to an attractive 4.2%, providing a nice boost to shareholder returns.

See our latest analysis for Mizuho Financial Group

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

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Having distributed dividends for at least 10 years, Mizuho Financial Group has a long history of paying out a part of its earnings to shareholders. Based on Mizuho Financial Group's last earnings report, the payout ratio is at a decent 37%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share is forecast to rise by 6.4% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 38%, which is in the range that makes us comfortable with the sustainability of the dividend.

Mizuho Financial Group Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from ¥60.00 total annually to ¥115.00. This works out to be a compound annual growth rate (CAGR) of approximately 6.7% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

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. Mizuho Financial Group has seen EPS rising for the last five years, at 49% per annum. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like Mizuho Financial Group's Dividend

Overall, a dividend increase is always good, and we think that Mizuho Financial Group 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Taking the debate a bit further, we've identified 1 warning sign for Mizuho Financial Group that investors need to be conscious of moving forward. 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.