Yamaguchi Financial Group (TSE:8418) Has Announced That It Will Be Increasing Its Dividend To ¥32.00

The board of Yamaguchi Financial Group, Inc. (TSE:8418) has announced that it will be paying its dividend of ¥32.00 on the 10th of December, an increased payment from last year's comparable dividend. Based on this payment, the dividend yield for the company will be 3.5%, which is fairly typical for the industry.

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

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Yamaguchi Financial Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 38%, which means that Yamaguchi Financial Group would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to rise by 17.1% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 37% by next year, which is in a pretty sustainable range.

View our latest analysis for Yamaguchi Financial Group

Yamaguchi Financial Group Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from ¥14.00 total annually to ¥64.00. This works out to be a compound annual growth rate (CAGR) of approximately 16% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Yamaguchi Financial Group has seen EPS rising for the last five years, at 13% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Yamaguchi Financial Group's prospects of growing its dividend payments in the future.

Yamaguchi Financial Group Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Now, if you want to look closer, it would be worth checking out our free research on Yamaguchi Financial Group management tenure, salary, and performance. Is Yamaguchi Financial Group 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.