Kita-Nippon Bank (TSE:8551) Is Due To Pay A Dividend Of ¥84.00
The board of The Kita-Nippon Bank, Ltd. (TSE:8551) has announced that it will pay a dividend on the 26th of June, with investors receiving ¥84.00 per share. This will take the annual payment to 4.0% of the stock price, which is above what most companies in the industry pay.
Kita-Nippon Bank's Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having distributed dividends for at least 10 years, Kita-Nippon Bank has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 31%, which means that Kita-Nippon Bank would be able to pay its last dividend without pressure on the balance sheet.
Over the next year, EPS could expand by 24.2% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 30% by next year, which is in a pretty sustainable range.
View our latest analysis for Kita-Nippon Bank
Dividend Volatility
While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2015, the dividend has gone from ¥60.00 total annually to ¥168.00. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Kita-Nippon Bank has been growing its earnings per share at 24% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.
Kita-Nippon Bank Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Kita-Nippon Bank is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Kita-Nippon Bank that investors should take into consideration. 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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