Fukui Bank (TSE:8362) Is Increasing Its Dividend To ¥46.00

The Fukui Bank, Ltd.'s (TSE:8362) dividend will be increasing from last year's payment of the same period to ¥46.00 on 1st of June. This takes the annual payment to 3.0% of the current stock price, which is about average for the industry.

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Fukui Bank's Earnings Will Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Fukui Bank has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Fukui Bank's last earnings report, the payout ratio is at a decent 36%, meaning that the company is able to pay out its dividend with a bit of room to spare.

If the trend of the last few years continues, EPS will grow by 5.0% over the next 12 months. 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.

View our latest analysis for Fukui Bank

Fukui Bank Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the annual payment back then was ¥50.00, compared to the most recent full-year payment of ¥75.00. This works out to be a compound annual growth rate (CAGR) of approximately 4.1% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

Fukui Bank Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Fukui Bank has impressed us by growing EPS at 5.0% per year over the past five years. Fukui Bank definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Fukui Bank Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Fukui Bank is a strong income stock thanks to its track record and growing earnings. 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. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Fukui Bank that investors should know about before committing capital to this stock. Is Fukui Bank not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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