T&D Holdings (8795): Insurance-related profit faces risks, but DPS growth strong; attractive valuation

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T&D Holdings (8795): Insurance-related profit faces risks, but DPS growth strong; attractive valuation

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T&D Holdings (8795)

Insurance-related profit faces risks, but

DPS growth strong; attractive valuation

Reiterate Rating: BUY | PO: 5,070 JPY | Price: 4,151 JPY

19 May 2026

Shareholder return policy allows for 12% avg DPS growth Equity

Current policy is to distribute 60% of adj. profit based on a 5-year avg as dividends. As

the 5-year average includes periods of lower profit, DPS can grow at around 12%

annually as profit increases toward the FY3/31 adj. profit target of ¥230bn. Share Key Changes

buybacks are conducted flexibly, and total payout ratio is set as 60% of each year’s adj. (¥) Previous Current

profit. While we believe the likelihood of zero share buybacks is low, there is a possibility Price Obj. 5,000.00 5,070.00

of high lapses at Taiyo Life’s products sold through banks, and with expenses trending 2027E EPS 335.97 358.78

upward, EV and ESR remains susceptible to declines due to assumption revisions.

Risk to insurance-profit rising, require more investment 2028E2029E EPSEPS 367.62405.39 372.63400.24

income

This is common across the life insurance sector: rising expenses are pressuring Natsumu Tsujino, CFA >>

insurance-related profit, which is being offset by higher interest and dividend income Research Analyst

BofAS Japan

and a decline in hedging costs. The improvement in spread gains in FY3/27 is around +81 3 6225-8720

¥10bn, but expenses are expected to increase by more than this. The FY3/27 Co.E natsumu.tsujino@bofa.com

assumes a ¥2.0bn impact from the scaling back of bank channel sales at Taiyo Life, and

if bank channel sales were to fall to zero, an additional ¥2.0bn decline in profit could

occur.