Sumitomo Mitsui Trust Group's (TSE:8309) Upcoming Dividend Will Be Larger Than Last Year's

Sumitomo Mitsui Trust Group, Inc. (TSE:8309) has announced that it will be increasing its dividend from last year's comparable payment on the 23rd of June to ¥90.00. This takes the annual payment to 3.8% of the current stock price, which is about average for the industry.

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Sumitomo Mitsui Trust Group's Payment Expected To Have Solid Earnings Coverage

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Sumitomo Mitsui Trust Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Sumitomo Mitsui Trust Group's payout ratio of 38% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to rise by 5.7% over the next year. If the dividend continues on this path, the future payout ratio could be 41% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Sumitomo Mitsui Trust Group

Sumitomo Mitsui Trust Group Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the annual payment back then was ¥55.00, compared to the most recent full-year payment of ¥180.00. This means that it has been growing its distributions at 13% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Sumitomo Mitsui Trust Group has seen EPS rising for the last five years, at 18% per annum. Sumitomo Mitsui Trust Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Sumitomo Mitsui Trust Group's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 8 analysts we track are forecasting for Sumitomo Mitsui Trust Group for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.