First Bank Of Toyama's (TSE:7184) Dividend Will Be ¥28.00
The First Bank Of Toyama, Ltd. (TSE:7184) will pay a dividend of ¥28.00 on the 25th of June. This makes the dividend yield about the same as the industry average at 3.2%.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that First Bank Of Toyama's stock price has increased by 36% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
First Bank Of Toyama's Dividend Forecasted To Be Well Covered By Earnings
Unless the payments are sustainable, the dividend yield doesn't mean too much.
First Bank Of Toyama has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 29%, which means that First Bank Of Toyama would be able to pay its last dividend without pressure on the balance sheet.
Over the next year, EPS could expand by 48.5% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 26% by next year, which is in a pretty sustainable range.
View our latest analysis for First Bank Of Toyama
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was ¥14.00 in 2015, and the most recent fiscal year payment was ¥56.00. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that First Bank Of Toyama has grown earnings per share at 49% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
First Bank Of Toyama Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for First Bank Of Toyama that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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