Bank of Nagoya's (TSE:8522) Dividend Will Be ¥110.00

The board of The Bank of Nagoya, Ltd. (TSE:8522) has announced that it will pay a dividend on the 24th of June, with investors receiving ¥110.00 per share. This takes the annual payment to 3.1% of the current stock price, which is about average for the industry.

See our latest analysis for Bank of Nagoya

Bank of Nagoya's Dividend Forecasted To Be Well Covered By Earnings

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

Bank of Nagoya 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 27%, which means that Bank of Nagoya would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share could rise by 18.5% 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 26% by next year, which we think can be pretty sustainable going forward.

Bank of Nagoya Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was ¥65.00, compared to the most recent full-year payment of ¥220.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

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 18% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Bank of Nagoya's prospects of growing its dividend payments in the future.

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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. See if management have their own wealth at stake, by checking insider shareholdings in Bank of Nagoya 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.