Top Japanese Dividend Stocks To Watch In August 2024

Japan's stock markets have recently faced significant volatility, with the Nikkei 225 Index and TOPIX Index experiencing notable declines amid a hawkish turn from the Bank of Japan. As investors navigate these turbulent times, dividend stocks can offer a measure of stability and income potential. In this environment, identifying strong dividend-paying companies becomes crucial. These stocks often provide consistent returns through dividends, which can be particularly appealing when market conditions are uncertain.

Top 10 Dividend Stocks In Japan

Name	Dividend Yield	Dividend Rating
Takeuchi Mfg (TSE:6432)	5.15%	★★★★★★
Yamato Kogyo (TSE:5444)	4.39%	★★★★★★
Japan Pulp and Paper (TSE:8032)	4.37%	★★★★★★
KSKLtd (TSE:9687)	4.69%	★★★★★★
FALCO HOLDINGS (TSE:4671)	6.91%	★★★★★★
KurimotoLtd (TSE:5602)	5.39%	★★★★★★
Nissin (TSE:9066)	4.90%	★★★★★★
Nichimo (TSE:8091)	4.86%	★★★★★★
GakkyushaLtd (TSE:9769)	4.43%	★★★★★★
Innotech (TSE:9880)	5.17%	★★★★★★

Click here to see the full list of 476 stocks from our Top Japanese Dividend Stocks screener.

Let's review some notable picks from our screened stocks.

Toa Road (TSE:1882)

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Toa Road Corporation operates in the civil engineering sector within Japan and has a market cap of ¥55.80 billion.

Operations: Toa Road Corporation's revenue segments include civil engineering services, generating ¥84.45 billion, and construction materials sales, contributing ¥13.28 billion.

Dividend Yield: 3.5%

Toa Road Corporation offers a reliable dividend yield of 3.46%, though it falls short compared to Japan's top 25% dividend payers. The company has consistently increased its dividends over the past decade, supported by a sustainable payout ratio of 52.5% and a cash payout ratio of 28.3%. Recent actions, such as the completion of a ¥1.18 billion share buyback program, highlight its commitment to returning profits to shareholders while maintaining stable earnings growth at an annual rate of 12.7%.

• Delve into the full analysis dividend report here for a deeper understanding of Toa Road.
• In light of our recent valuation report, it seems possible that Toa Road is trading beyond its estimated value.

Soken Chemical & Engineering (TSE:4972)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Soken Chemical & Engineering Co., Ltd. manufactures and sells acrylic pressure-sensitive adhesives, functional polymers, organic fine particles, and adhesive tapes in Japan, China, and internationally with a market cap of ¥21.53 billion.

Operations: Soken Chemical & Engineering Co., Ltd. generates revenue from its Chemicals segment, which accounts for ¥37.60 billion, and its Equipment System segment, contributing ¥3.82 billion.

Dividend Yield: 3.7%

Soken Chemical & Engineering's dividend payments have been volatile over the past decade, with significant drops exceeding 20% in some years. Despite this, recent earnings growth of 83.1% and a low payout ratio of 26.5% suggest dividends are currently well-covered by both earnings and cash flows (19.8%). Trading at a price-to-earnings ratio of 8.2x, below the JP market average, it offers good relative value but remains highly volatile with a dividend yield of 3.65%.

• Click here to discover the nuances of Soken Chemical & Engineering with our detailed analytical dividend report.
• Our valuation report here indicates Soken Chemical & Engineering may be undervalued.

Tokyo Tekko (TSE:5445)

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Tokyo Tekko Co., Ltd. manufactures and sells steel products for the construction industry in Japan, with a market cap of ¥40.86 billion.

Operations: Tokyo Tekko Co., Ltd. generates revenue primarily through the manufacture and sale of steel products tailored for Japan's construction sector.

Dividend Yield: 5%

Tokyo Tekko's dividend payments have been volatile over the past decade, with significant drops in some years. However, a low payout ratio of 26.7% and cash payout ratio of 27.3% indicate dividends are well-covered by earnings and cash flows. The company recently completed a share buyback program worth ¥499.66 million to enhance shareholder returns and improve capital efficiency. Despite high share price volatility, it offers a top-tier dividend yield of 5.04%.

• Take a closer look at Tokyo Tekko's potential here in our dividend report.
• Upon reviewing our latest valuation report, Tokyo Tekko's share price might be too pessimistic.

Turning Ideas Into Actions

• Access the full spectrum of 476 Top Japanese Dividend Stocks by clicking on this link.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Ready To Venture Into Other Investment Styles?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

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.

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