Chugin Financial GroupInc's (TSE:5832) Shareholders Will Receive A Bigger Dividend Than Last Year

Chugin Financial Group,Inc. (TSE:5832) will increase its dividend from last year's comparable payment on the 29th of June to ¥42.00. This makes the dividend yield about the same as the industry average at 3.2%.

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Chugin Financial GroupInc's Dividend Forecasted To Be Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Chugin Financial GroupInc has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 59%, which means that Chugin Financial GroupInc would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to expand by 20.4%. If the dividend continues on this path, the future payout ratio could be 44% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Chugin Financial GroupInc

Chugin Financial GroupInc Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of ¥18.00 in 2015 to the most recent total annual payment of ¥79.00. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Chugin Financial GroupInc has impressed us by growing EPS at 23% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Chugin Financial GroupInc could prove to be a strong dividend payer.

Chugin Financial GroupInc Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Chugin Financial GroupInc 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in Chugin Financial GroupInc in our latest insider ownership analysis. If you are a dividend investor, you might also want to look at our curated list of high yield 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.