Shares of Nikko Cordial (NIKOY.PK), Japan's third largest securities brokerage jumped 4.7% earlier today in Tokyo to close at 2,005 yen. Reuters reports that its intra-day high of 2,015 yen is the highest it's been since July 2001. Similar to their counterparts in the U.S., Japanese brokerage stocks have been hot. Nikko Cordial is darling of the Nikkei because it will be boosting its year-end (March 31st) dividend from 7 yen a year ago to 30 yen, bringing its total dividend for the year (including interim dividend) to 50 yen versus 12 yen a year ago.
Nikko Cordial has stated that it plans to maintain a dividend payout ratio of about 50% of consolidated net income. It also has set a minimum annual dividend of 8 yen per share regardless of what net income is.
As of closing today in Tokyo, Nikko Cordial's yield is 2.50%. This is very attractive compared to the 0.76% trailing twelve month yield and even against the 0.89% forward yield of the Nikkei 225 Stock Average.
Also, in addition to its notice of raising its dividend, Nikko Cordial simultaneously released forecasted financial results for the fiscal year ending March 31st, 2006. It is forecasting a y-o-y 37% increase in Net Operating Revenue, a 109.7% increase in Ordinary Income, and a 100.3% increase in Net Income.
Click here to read more about Nikko Cordial's dividend announcement and its financial forecast.
For additional reading on Nikko Cordial see the following link:
Nikko Cordial: Taking Profits, But Still Liking The Long Position (OTC:NIKOY)
Remember that Nikko Cordial's ADRs are traded on the pink sheets and typically have a low volume possibly resulting in wide bid-ask spreads. Make use of limit orders when you trade to protect yourself.
NIKOY.PK 1-yr chart:
Nikko Cordial (Tokyo: 8603) 1-yr chart as of 3/17: