Key Facts
• In 2024, the “New NISA” tax-free investment program was introduced in Japan.
• New NISA exempts lifetime taxes on stock and mutual fund gains, including dividends.
• High-dividend stocks are defined as those with a dividend yield exceeding 3%.
• Dividend yield formula: (Annual Expected Dividend ÷ Stock Price) × 100%.
• High yields may indicate declining stock prices due to poor company performance.
• Companies with consistent “dividend increases” or “progressive dividends” are ideal for long-term investment.
• Example: A stock bought at ¥3,000 with a ¥60 dividend (2% yield) can grow to a 3.3% yield if dividends increase to ¥100.
• Key selection criteria: dividend yield above 2%, consistent dividend growth, and a payout ratio of 30–50%.
• Warning: Payout ratios over 100% or negative indicate unsustainable dividends.
• Strong candidates show rising revenue, operating profit, and earnings per share (EPS) over 3–5 years.
• “Progressive dividend” stocks maintain or increase dividends, offering stability for investors.
• Investors can check company financials via shareholder reports or mid-term business plans.
Summary
The New NISA program, launched in 2024, offers lifetime tax exemptions on investment gains, including dividends, making high-dividend stocks increasingly attractive. High-dividend stocks typically yield over 3%, but investors should avoid focusing solely on yield, as high yields may signal declining stock prices due to poor performance. Ideal stocks exhibit consistent dividend growth, a balanced payout ratio (30–50%), and rising revenue, operating profit, and EPS. “Progressive dividend” stocks, which maintain or increase dividends, provide long-term stability. Investors are advised to research company financials and trends before investing. By following these guidelines, high-dividend stocks can become valuable long-term assets.
