(This post is a translation of our Japanese message targeted towards Japanese corporates and investors)
Hello, this is Yuya Shimizu. Today, Nikkei published a brief article about Dividend On Equity (DOE).
“DOE” policy at record high (Japanese only)
According to the article, the number of Japanese companies adopting DOE surged by 60% YoY during the January–May 2025 period, marking an all-time high.
As the article says, many Japanese companies have begun introducing DOE in recent years. However, we had actively been encouraging our portfolio companies to adopt DOE as early as 2019, which you can also find in our old post titled “A Brief Essay About ‘Dividends’.” While Nikkei may refer DOE as a “new type of dividend policy,” the concept actually predates the dividend policy based on “payout ratio” and goes all the way back to the early days of capitalism —the era of the British East India Company! DOE aligns well with the concept of ROE, brings greater stability to dividends, and truly benefits all stakeholders.
The post delves into both the historical background of dividends and the practical advantages of DOE. We encourage you to give it another read—and hope many more Japanese companies introduce this rational payout policy.
This post does not constitute a solicitation for an offer to acquire or recommend the purchase or sale of specific securities, or advice on investment, legal, tax, accounting, or any other matters.