Against the backdrop of Japan’s long-standing ultra-low interest rate policy, dividend stocks continue to be appealing to many Japanese investors.
We previously covered 4 Japanese companies with what we think are stable high dividends.
A changing ladscape
The Japanese Financial Services Agency and the Tokyo Stock Exchange have been pushing forward with corporate governance reforms to create more transparency.
As a result of this, coupled with companies’ need to attract new investors, the dividends of many Japanese companies have been increasing year on year.
The total amount of dividends paid to shareholders in fiscal 2016 reached a record high of ¥1.18 trillion. The trend of increasing dividends has been continuing in the each year since.
As in many other countries, investors in Japan have confidence in the stable performance and management of companies who gradually increase their dividend payments, as it a signal that the company is improving its performance year on year.
While it is true that some companies continue to increase their dividends in order to distract people from flaws in their business, below we pick out 10 companies which stick out from the crowd.
1. Nitori Holdings co. Ltd.
Dividend Yield: 0.547%
Dividend per Share (JPY): 108
Nitori Holdings Co., Ltd is one of the top manufacturers and retailers of furniture and home furnishings in Japan, competing domestically with IKEA. The company was founded in December 1967.
Like IKEA, the company’s large stores have traditional been found in the suburbs of big cities, but it is now following a trend of opening smaller stores in the middle of densely-populated urban areas.
Nitori has 523 stores in Japan and overseas, and has continued to increase profits for 31 consecutive years (end of February 2018).
Original products such as bedding with cooling features have been performing well in recent years. Their dividend has increased for 14 consecutive years.
2. Ricoh Leasing Co. Ltd.
Dividend Yield: 3.45%
Dividend per Share (JPY): 90
Founded in December 1976, Ricoh Leasing Co., Ltd. engages in leasing and financial services business.
The leasing segment provides financing and leasing of offices, medical instruments, printing, industrial machinery, and measuring equipment.
The Financial Service business covers corporate loans, mortgage and housing loans, credit cards and asset management services.
The company has a good reputation domestically for for dealing with small and medium-sized enterprises. Their dividend has increased for 18 consecutive years.
3. KDDI Corp.
Dividend Yield: 4.11%
Dividend per Share (JPY): 115
KDDI is a major Japanese telecommunications company. Its business is composed of mobile communication business and optical line business. Both segments of the company have been performing well in recent years.
The company has the largest cable TV company, JCOM, under its umbrella, and it also operates “AU”, one of Japan’s largest mobile phone carriers.
Softbank, NTT Docomo and AU have traditionally been dominant in the mobile network business. However, their supremacy has been under increasing pressure from competitors like Rakuten and Line, who have ventured into the cellular network space and have been providing similar services for around half the price.
AU is expected to announce a dramatic reduction in price in response to the growing competition, and it will be interesting to see if KDDI can maintain its policy of increasing dividends.
4. Rinnai Corp.
Dividend Yield: 1.11%
Dividend per Share (JPY): 98
Founded in 1920, Rinnai develops and manufactures thermal energy equipment such as water heaters and gas stoves.
It has been actively expanding overseas such as in South Korea, China, the United States, and Australia.
5. Kobayashi Pharmaceutical Co. Ltd.
Dividend Yield: 0.766%
Dividend per Share (JPY): 73
Founded in 1886, Kobayashi Pharmaceutical Co. is a veteran pharmaceutical and health tech company. It also provides a variety of domestic household products in a wide variety of fields and leads the way in the deodorant market.
The company has a reputation for developing niche products in pharmaceuticals, health foods, and dietary supplements.
6. Sysmex Corp.
Dividend Yield: 0.77%
Dividend per Share (JPY): 72
Founded in 1968, Sysmex Corp. develops, manufactures, sells, exports, and imports diagnostic instruments and software used in healthcare businesses.
It has the top domestic market share in the clinical testing business and the world’s top market share in blood cell counting equipment.
7. Kao Corp.
Dividend Yield: 1.72%
Dividend per Share (JPY): 130
This long-running company was founded in 1887, and holds the No. 1 spot in Japan for toiletries.
The company’s Skin Care and Hair Care business delivers skin care products such as facial cleansers, body cleansers, sunscreens, and body lotions.
Kao Corp. owns a number of international brands such as RMK, SUQQU, Primavista, COFFRET DOR, KATE, SENSAI, and Molton Brown.
In fiscal 2016, the Kao achieved record high profit for the fourth consecutive year.
8. Sundrug Co. Ltd.
Dividend Yield: 1.73%
Dividend per Share (JPY): 68
Founded in 1957, Sundrug Co., Ltd. (website in Japanese) is a large Japanese drug store company.
Drug stores in Japan offer a wide variety of products and can be better described as supermarkets with pharmacies attached.
The company has 937 stores nationwide which sell pharmaceutical products, cosmetics, and general merchandise.
9. USS Co. Ltd.
Dividend Yield: 2.96%
Dividend per Share (JPY): 55
Established in 1980, USS stands for Used Car System Solutions. It operates several automobile auction management businesses.
The company also operates a used car purchase specialty store, Rabbit.
10. Mitsubishi UFJ Lease & Finance Co. Ltd.
Dividend Yield: 4.6%
Dividend per Share (JPY): 25
Founded in 1971, Mitsubishi UFJ Lease & Finance Co. Ltd. operates leasing businesses of various types of properties and financial services, and recently formed an alliance with Hitachi Capital.
The company is dominant in the leasing field domestically, and active in overseas expansion through M&A.