Yamaguchi Financial Group's (TSE:8418) Dividend Will Be ¥30.00

Yamaguchi Financial Group, Inc. (TSE:8418) has announced that it will pay a dividend of ¥30.00 per share on the 30th of June. This takes the annual payment to 3.7% of the current stock price, which is about average for the industry.

View our latest analysis for Yamaguchi Financial Group

Yamaguchi Financial Group's Dividend Forecasted To Be Well Covered By Earnings

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

Yamaguchi Financial Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Yamaguchi Financial Group's latest earnings report puts its payout ratio at 17%, showing that the company can pay out its dividends comfortably.

Looking forward, earnings per share is forecast to rise by 17.9% over the next year. If the dividend continues on this path, the future payout ratio could be 43% by next year, which we think can be pretty sustainable going forward.

Yamaguchi 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 ¥14.00, compared to the most recent full-year payment of ¥60.00. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Yamaguchi Financial Group has impressed us by growing EPS at 7.5% per year over the past five years. 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, a dividend increase is always good, and we think that Yamaguchi Financial Group 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. See if management have their own wealth at stake, by checking insider shareholdings in Yamaguchi Financial Group stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.