Kyushu Financial Group (TSE:7180) Is Increasing Its Dividend To ¥14.00

Kyushu Financial Group, Inc. (TSE:7180) will increase its dividend from last year's comparable payment on the 2nd of June to ¥14.00. This makes the dividend yield about the same as the industry average at 2.6%.

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Kyushu Financial Group'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, Kyushu Financial Group has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Kyushu Financial Group's payout ratio of 28% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS is forecast to expand by 6.0%. If the dividend continues on this path, the future payout ratio could be 33% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Kyushu Financial Group

Kyushu Financial Group Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was ¥5.00 in 2015, and the most recent fiscal year payment was ¥26.00. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Kyushu Financial Group has seen EPS rising for the last five years, at 18% per annum. 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.

Kyushu Financial Group Looks Like A Great Dividend Stock

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

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Kyushu Financial Group stock. Is Kyushu Financial Group 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.