Bank of Nagoya (TSE:8522) Will Pay A Dividend Of ¥110.00

The Bank of Nagoya, Ltd.'s (TSE:8522) investors are due to receive a payment of ¥110.00 per share on 24th of June. This makes the dividend yield about the same as the industry average at 2.9%.

Check out our latest analysis for Bank of Nagoya

Bank of Nagoya's Payment Expected To Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Having distributed dividends for at least 10 years, Bank of Nagoya has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, Bank of Nagoya's payout ratio sits at 24%, an extremely comfortable number that shows that it can pay its dividend.

If the trend of the last few years continues, EPS will grow by 16.0% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 24% by next year, which we think can be pretty sustainable going forward.

Bank of Nagoya 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 ¥65.00 total annually to ¥220.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Bank of Nagoya has been growing its earnings per share at 16% a year over the past five years. Bank of Nagoya definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Bank of Nagoya 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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Are management backing themselves to deliver performance? Check their shareholdings in Bank of Nagoya in our latest insider ownership analysis. Is Bank of Nagoya 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.