Japan Post Bank Co Ltd's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance
Japan Post Bank Co Ltd (JPSTF) recently announced a dividend of $50 per share, payable on a date yet to be determined, with the ex-dividend date set for 2024-03-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Japan Post Bank Co Ltd's dividend performance and assess its sustainability.
What Does Japan Post Bank Co Ltd Do?
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Japan Post Bank is the successor of the postal-savings system dating to the Meiji era. It was partially privatized in 2015, when the government sold to the public an 11% stake in parent company Japan Post Holdings, which in turn sold 11% stakes in Japan Post Bank and Japan Post Insurance to the public. Japan Post Bank is now 64% owned by Japan Post Holdings, which is majority owned by the government. The law requires Japan Post Holdings to divest itself of Japan Post Bank eventually. Japan Post Bank has 235 direct branches and also accepts deposits and sells investment products at more than 24,000 post offices across the country through a sales-agency agreement with Japan Post (an unlisted subsidiary of Japan Post Holdings).
A Glimpse at Japan Post Bank Co Ltd's Dividend History
Japan Post Bank Co Ltd has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Japan Post Bank Co Ltd's Dividend Yield and Growth
As of today, Japan Post Bank Co Ltd currently has a 12-month trailing dividend yield of 3.56% and a 12-month forward dividend yield of 3.71%. This suggests an expectation of increased dividend payments over the next 12 months. Based on Japan Post Bank Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Japan Post Bank Co Ltd stock as of today is approximately 3.56%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Japan Post Bank Co Ltd's dividend payout ratio is 0.56. Japan Post Bank Co Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Japan Post Bank Co Ltd's profitability 4 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Japan Post Bank Co Ltd's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and Japan Post Bank Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Japan Post Bank Co Ltd's revenue has increased by approximately 3.60% per year on average, a rate that underperforms approximately 66% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Japan Post Bank Co Ltd's earnings increased by approximately 6.00% per year on average, a rate that underperforms approximately 63.06% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 1.20%, which underperforms approximately 74.51% of global competitors.
Engaging Conclusion
Considering Japan Post Bank Co Ltd's dividend payments, growth rate, payout ratio, profitability, and growth metrics, investors are faced with a mixed outlook. While the company has a history of consistent dividend payments, the growth ranks and competitive performance suggest caution when assessing long-term sustainability. Investors should closely monitor the company's financial health and market position while considering the broader economic and industry trends. For those seeking additional investment opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener. As Japan Post Bank Co Ltd navigates the challenges ahead, will its dividend remain a beacon of reliability for investors?
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
