Resona Holdings Inc's Dividend Analysis
Unveiling the Dividend Prospects of Resona Holdings Inc
Resona Holdings Inc (RSNHF) recently announced a dividend of $0.11 per share, payable on a date yet to be announced, 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 Resona Holdings Inc's dividend performance and assess its sustainability.
What Does Resona Holdings Inc Do?
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Resona Holdings is one of the top six Japanese banking groups by assets. Although its banking units are categorized in Japan as "city" banks for historical reasons, it is only around a third of the size of the three megabank groups and effectively a super-regional bank operating mainly in the Kansai region (54% of its branches) and the Tokyo metropolitan area (43% of branches), with a strong focus on retail and small and medium-size enterprises, rather than lending to large corporates. Its overseas operations are limited, which allows it to operate in compliance with domestic capital standards alone.
A Glimpse at Resona Holdings Inc's Dividend History
Resona Holdings Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Resona Holdings Inc's Dividend Yield and Growth
As of today, Resona Holdings Inc currently has a 12-month trailing dividend yield of 2.34% and a 12-month forward dividend yield of 2.53%. This suggests an expectation of increased dividend payments over the next 12 months. Extended to a five-year horizon, this rate increased to 0.70% per year. And over the past decade, Resona Holdings Inc's annual dividends per share growth rate stands at 4.90%.
Based on Resona Holdings Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Resona Holdings Inc stock as of today is approximately 2.42%.
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, Resona Holdings Inc's dividend payout ratio is 33%.
Resona Holdings Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Resona Holdings Inc's profitability 5 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each of the years over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Resona Holdings Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Resona Holdings Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Resona Holdings Inc's revenue has decreased by approximately -1.10% per year on average, a rate that underperforms approximately 83.39% 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, Resona Holdings Inc's earnings increased by approximately 0.70% per year on average, a rate that underperforms approximately 77.13% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -8.50%, which underperforms approximately 91.93% of global competitors.
Next Steps
In conclusion, while Resona Holdings Inc has demonstrated a history of consistent dividend payments, its dividend growth rate, payout ratio, and profitability indicate a stable dividend profile. However, investors should be cautious about the company's growth metrics, which suggest potential challenges ahead. With revenue and earnings growth underperforming compared to global peers, the long-term sustainability of Resona Holdings Inc's dividends may hinge on the company's ability to reverse these trends and capitalize on new opportunities. As value investors weigh these factors, they should consider whether the current yield and growth prospects align with their investment goals. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find opportunities that best fit their portfolio strategies.
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.
