[Dividend Kings] Top 20 Japanese Dividend Stocks
These are the top 20 Japanese stocks that have continuously increased their dividend over the longest period of time (December 2022)
Table of Contents
1. Definition of Dividend Kings
Stocks with consecutive dividend increases are stocks of companies that continue to increase their dividend amount yearly. In particular, stocks that have been increasing dividends for more than 25 years are called "Dividend Aristocrats," and stocks that have increased their dividends for more than 50 years are called "Dividend Kings."
There are no objective benefits to buy stocks with consecutive dividend increases other than their historical consistency. In fact, stocks that increase dividend by a large amount cannot be Dividend Kings as its impossible to uphold increases over such a long period of time.
2. State of dividend kings in Japan
There are not many stocks with consecutive dividend increases in Japan.
This is the total number of listed companies on the Tokyo Stock Exchange:
Of those companies there is not a single Dividend King!
In fact, there is only one Dividend Aristocrat, Kao Corporation, a chemical and cosmetics company headquartered in Tokyo. The company has achieved a consecutive dividend increase for 32 years.
3. Why are there so many Dividend Kings in the US and none in Japan?
Compared to Japan, there are multiple dividend kings and dividend aristocrats in the United States.
What is the reason for the difference in the number of dividend kings and aristocrats between the United States and Japan?
Current Status of dividend kings in the US
In the United States, there are more than 25 dividend kings and more than 50 dividend aristocrats.
Most popular Dividend Kings & Aristocrats in the US:
Differences in the view of shareholders between Japan and the US
First of all, the US is the world outlier when it comes to dividend kings. No other country comes close to the dividends paid-out by US companies.
Secondly, the reason why the US topples Japan when it comes to dividends is the difference in awareness of shareholder returns.
In the United States, a company is considered to belong to the shareholders who invests in it, so shareholder returns are often their biggest priority.
In Japan, many companies presume that they belong to their employees, and shareholder returns, such as dividends, are often not actively pursued. Profits earned from corporate activities are often retained earnings as funds to prepare for future contingencies or to invest in future business expansion.
Hence, in the United States, the dividend payout ratio is substantially higher than in Japan. Even stocks that have been increasing their dividends for many years have a higher dividend payout ratio. As a consequence, Japanese companies are generally in much less debt than their US counterparts.
Lastly, Japan has been in a deflationary cycle for the past 30 years, which means that even though companies haven’t increased their dividends, the yen increase has made their dividend more valuable. So, if currency inflation difference between the US dollar and the Japanese yen were accounted, there would likely be far more Japanese dividend aristocrats.
Potential dividend aristocrats are increasing in Japan
Recently, many Japanese shareholders have pushed for greater shareholder returns, and an increasing number of companies have been actively paying higher dividends. As a result, more and more companies are working to increase dividends continuously.
Although there is still only one dividend aristocrat in Japan (likely two by next year), it is worth noting that there is a record number of Japanese companies that have been increasing their dividends for more than 10 years.