The board of The Bank of Nagoya, Ltd. (TSE:8522) has announced that it will be paying its dividend of ¥110.00 on the 9th of December, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 2.8%.
Check out our latest analysis for Bank of Nagoya
Bank of Nagoya's Earnings Will Easily Cover The Distributions
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
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. Based on Bank of Nagoya's last earnings report, the payout ratio is at a decent 26%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, earnings per share could rise by 13.3% 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 32% 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 2014, 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
The company's investors will be pleased to have been receiving dividend income for some time. Bank of Nagoya has impressed us by growing EPS at 13% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
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. 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. 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 Bank of Nagoya stock. 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.
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About TSE:8522
Solid track record average dividend payer.
