Sumitomo Mitsui Is A Global Banking Force

Every New York stock exchange trading day I'm posting a daily dividend stock or fund review. I'll share the three chief qualities of just one equity or fund that could be selected for a dividend stock portfolio I've named the Safari to Sweet Success.

This week the portfolio I'm building (my Safari To Sweet Success portfolio) seeks a high-yield and growing stock in the financial services sector. 

The financial sector includes nineteen industries all related to managing money: asset management; banks either global or from any of seven regions, capital markets, credit services, financial exchanges, insurance in six specializations, savings banks, and specialty finance.

Today I'm reviewing a Large-Cap Global Bank. The company's name is Sumitomo Mitsui Financial Group, Inc. Its trading ticker symbol is SMFG.

Sumitomo Mitsui Financial Group, Inc. and its subsidiaries offer a diverse range of financial services, including commercial banking, leasing, securities, consumer finance and other services.

Its Commercial Banking segment is the largest offering banking services for individuals, organizations, trusts and international entities

As of March 31, 2017, it had 440 branch offices in Japan; 18 branches, 20 sub-branches, and 4 representative offices internationally; and 54,947 ATMs. 

The company's Leasing segment offers equipment, operating, leveraged, aircraft, small-ticket, and automotive leasing. Its Securities segment provides financial products, investment consultation, and administration services to individual and corporate customers

The company's Consumer Finance segment offers credit cards, and related settlement and financing services to individuals. 

Sumitomo Mitsui Financial Group, Inc. also provides system development, data processing, management consulting, and economic research services; and system engineering and information services, as well as engaging in venture capital business. 

The company is headquartered in Tokyo, Japan.

I use three key data points gauge the value of any dividend equity or fund like Sumitomo Mitsui Financial Group, Inc. (SMFG): 

(1) Price

(2) Dividends

(3) Returns

After those three, four more keys will finally unlock an equity or fund in which to invest. 

No matter what, it's the first three primary traits that best tell whether a company has made, is making, and will make money. 

SMFG Price

SMFG's price was $8.33 per share at yesterday's market close. A year ago its price was $7.28 for a gain of $1.05 per share in the past year.  

Assuming SMFG's price will continue to trade in the range of $7.00 to $10.00 next year, its price could grow another $1.05 from $8.33 to $9.38 by late-May, 2019. 

SMFG Dividends

SMFG's most recently declared variable semi-annual dividend was $0.14 per share paid last September. That $0.14 semi-annual dividend equates to an estimated annual payout of $0.28 for 2018 which yields 3.36% at yesterday's $8.33 closing stock price. However, an expectedMarch 2018 dividend installment has not been paid.

Gains For SMFG?

The $1.05 estimated year over year price gain plus an anticipated dividend of$0.28 makes a projected gross annual gain of $1.33 per share, which will be reduced by the costs to trade those shares.  

$1,000.00 invested today at the $8.33 price buys 120 shares. 

A $10 broker fee paid half at purchase and half at sale subtracts$0.08 per share.

Taking that $0.08 brokerage cost out of the estimated $1.33 gross gain per share leaves a net gain of $1.25 X 120 shares = $150.00 or a 15% potential net gain on a $999.60 investment.

Therefore, Sumitomo Mitsui Financial Group, Inc. (whose ticker symbol is SMFG), now shows a possible 15% net gain including a 3.6% dividend yield. 

One analyst covers this stock:

She says "buy."

The median analyst recommendation is 1.0 or Buy and her price target is almost $1.14 above the estimated year over year number I just calculated.

Y Charts rates SMFG "neutral" for an overall "Y" rating. Y Charts also shows "Excellent" for a Value score of 10 out of ten points. And YCharts ranks SMFG "strong" with 7 out of 10possible Fundamental points. Y Charts Historic Valuation score is 30.38% overvalued, based on a $6.39 historic value multiple.

You could look at all those numbers like this: Sumitomo Mitsui Financial Group, Inc. (SMFG) has made money, is making money, and could net an 15% net gain next year including a 3.6% dividend yield. It could be more, it could be less.

The above speculation is conjecture based on past year performance. Actual results remain to be seen. They could turn out to be far higher or lower. More study is required for you to determine if Sumitomo Mitsui Financial Group, Inc. (SMFG) is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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