Exploring the Tokyo Stock Exchange's Top Three Dividend Stocks with Yields of Up to 3.7%

Amid global market volatility, Japanese stocks have retreated from recent highs, driven by interventions aimed at stabilizing the yen. This dynamic market environment underscores the appeal of dividend stocks, which can offer investors potential stability and consistent returns in times of uncertainty.

Top 10 Dividend Stocks in Japan

Click here to see the full list of 385 stocks in our Best Japanese Dividend Stocks Analysis tool.

Let's review some notable picks from our selected stocks.

Simply Wall St Dividend Rating:

Preview: Persol Holdings Co., Ltd. operates globally and provides human resources services under the PERSOL brand, with a market capitalization of approximately $588.16 billion.

Operations: Persol Holdings Co., Ltd. generates revenue through various segments including Career ($128.28 billion), Technology ($102.38 billion), Asia Pacific ($412.77 billion) and Staffing excluding BPO ($575.80 billion).

Dividend yield: 3.5%

Persol Holdings Ltd’s dividend yield stands at 3.47%, placing it in the top 25% of Japanese dividend payers. Despite a volatile dividend history over the past decade, recent earnings growth of 45.6% and forecasts for a 12.02% annual increase suggest potential stability ahead. Dividends are well supported by both earnings, with a payout ratio of 65.1%, and cash flow, with a cash payout ratio of 32.8%. The company has also committed to improving shareholder returns through a substantial share buyback program totaling 20 billion, aiming to repurchase up to 5.41% of its shares by March 2025, demonstrating confidence in its financial health and commitment to returning value to shareholders.

Simply Wall St Dividend Rating:

Preview: Bewith, Inc. operates in Japan, offering contact and call center services as well as business process outsourcing (BPO) solutions that leverage digital technologies, with a market capitalization of approximately 29.29 billion.

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Operations: Bewith, Inc. generates $38.25 billion in revenue from its digitally-driven call and contact center operations and business process outsourcing services.

Dividend yield: 3.7%

Bewith, Inc. recently increased its dividend from JPY 49.00 to JPY 53.00 per share and anticipates a further increase to JPY 77.00 for the next fiscal year, reflecting a positive trend despite its two-year dividend history. The company's dividends appear sustainable with a payout ratio of 40.4% and are supported by earnings growth projections of 18.48% per year and strong cash flow coverage with a cash payout ratio of 57%. Trading at a significant undervaluation, Bewith offers good relative value in the market.

Simply Wall St Dividend Rating:

Preview: Business Brain Showa-Ota Inc., a Japan-based company, specializes in system development consulting and solutions with a market capitalization of approximately 26.28 billion.

Operations: Business Brain Showa-Ota Inc. generates its revenue primarily from consulting and system development solutions in Japan.

Dividend yield: 3.4%

Business Brain Showa-Ota Inc. offers a solid dividend yield of 3.44%, placing it in the top 25% of Japanese dividend payers. Its dividends are well supported by a low payout ratio of 5.1% and a cash payout ratio of 33%, ensuring sustainability and coverage by both earnings and cash flow. The stock is trading at a 32.9% discount to its estimated fair value, reinforcing its appeal as an investment option despite the company’s significant earnings growth of 669.6% over the past year, suggesting solid financial health and the potential for continued dividend reliability and growth.

Next steps

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to constitute financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. Our goal is to provide you with focused, long-term analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative information. Simply Wall St has no position in any of the stocks mentioned.

Companies featured in this article include EST: 2181 EST: 9216 And EST: 9658.

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