Mizuho Leasing (8425): 4% Yield U.S. Investors Overlook

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¥47.6 billion in record net profit, a PBR below book value, and a forward yield above 4% — yet Mizuho Leasing barely registers on most US dividend screens. That gap is the opportunity. — DividendDan

Metric	Value
Stock Price (JPY)	¥1,331 (May 22, 2026)
Dividend Yield (Trailing)	3.83%
Forward Dividend Yield	~4.28%
Annual Dividend per Share	¥51 (FY2025); ¥52 projected FY2027
P/E Ratio (TTM)	7.83x
P/B Ratio	0.89x
Market Cap	¥376.2 billion
Payout Ratio	~30%
FY2026 Net Profit (record)	¥47.6 billion (+13.3% YoY)
52-Week Range	Not provided — verify via TSE or IBKR

Disclosure: Educational content only, not investment advice. The author does not currently hold positions in stocks mentioned. See Disclaimer for FTC 16 CFR Part 255 compliant details.

Most US dividend investors scanning Japan stop at the trading houses or megabanks. That instinct leaves an entire sector largely overlooked: Japanese leasing companies with low payout ratios, sub-book valuations, and yields that embarrass most US financials.

This article focuses on Mizuho Leasing (TSE: 8425) — the highest-yield name in the Japanese leasing cohort — and explains what the numbers actually mean for a US-based dividend investor.

Key Primary Sources: Mizuho Leasing IR (日本語) | EDINET Corporate Filings | OpenWork 社員口コミ | みんかぶ アナリスト予想 | 四季報オンライン | Fuyo General Lease IR (日本語)

The Sector US Investors Keep Skipping

Japan’s leasing industry is dominated by large, bank-affiliated conglomerates that finance everything from aircraft and medical equipment to office furniture and IT infrastructure.

Unlike US equipment-leasing companies, Japanese lessors operate under a relationship-banking model. Long-term corporate clients renew lease contracts repeatedly, creating sticky, recurring revenue streams that support consistent dividend policies.

Mizuho Leasing, Fuyo General Lease (8424), and Mitsubishi HC Capital (8593) represent the core of this cohort — each with multi-decade dividend track records and payout ratios well below 45%.

Why Negative Free Cash Flow Is a Feature, Not a Flaw

The first thing a US investor notices when screening Japanese leasing stocks is negative free cash flow. On a standard screener, that looks alarming. In leasing, it is structural.

Leasing businesses front-load capital expenditure to acquire assets — aircraft, machinery, real estate — which are then monetized over multi-year lease terms. Cash goes out today; it comes back in installments over the next 3–10 years.

This timing mismatch creates negative FCF on paper while generating strong operating earnings. The correct lens is ROE and payout ratio, not free cash flow yield.

Mizuho Leasing’s ~30% payout ratio target illustrates the point. The dividend is covered by earnings, not by drawing down reserves or borrowing to pay shareholders.

Mizuho Leasing (8425): FY2026 Results and Dividend Track Record

Mizuho Leasing is the leasing arm of the Mizuho Financial Group, Japan’s third-largest banking group. Its corporate parentage provides low-cost funding and a deep pipeline of corporate clients.

For the full year FY2026 (ended March 2026), Mizuho Leasing reported record-high net profit attributable to parent of ¥47.609 billion (+13.3% YoY), exceeding its Medium-Term Management Plan 2025 target one year ahead of schedule.

Full-year FY2026 revenue reached ¥921.6 billion (+32.5% YoY). However, operating profit fell 8.8% YoY to ¥44.7 billion — a margin compression signal worth monitoring as BOJ rate hikes continue.

On the dividend: According to Mizuho Leasing’s Japanese-language IR page, the annual dividend per share (adjusted for the 5-for-1 stock split effective April 1, 2024) was ¥51.00 for FY2024 (ended March 2024) and remained ¥51.00 for FY2025 (ended March 2025). This represents a flat — not growing — dividend over that two-year period on a split-adjusted basis.

Investors should note this distinction: the dividend did not decrease, but it did not increase either across FY2024–FY2025. The company announced a lifted final dividend for FY2026, and the 四季報 (Kaisha Shikiho) projects a ¥52/share dividend for FY2027 — a ¥1 increase. This confirms a continued, if measured, upward trajectory rather than a dramatic multi-year growth streak.

At ¥1,331/share (May 22, 2026), the trailing yield is 3.83% and the forward yield (based on ¥52 projected dividend) is approximately 4.28%. The payout ratio on FY2026 EPS of approximately ¥170 is roughly 30% — leaving substantial room for future increases.

Japan-Local Intelligence: What US Investors Cannot See

One edge this blog offers US readers is access to Japanese-language data sources that most overseas investors cannot navigate directly.

OpenWork employee score: Mizuho Leasing holds a company evaluation score of 3.82 out of 5.0 on OpenWork (オープンワーク) — Japan’s equivalent of Glassdoor. Standout sub-scores include compliance awareness (4.8/5) and treatment satisfaction (4.3/5). Reviewers describe it as a “typical white company” (ホワイト企業) with good work-life balance.

A 3.82/5 OpenWork score — particularly the 4.8 compliance sub-score — suggests a management culture that is unlikely to take the kind of governance shortcuts that have derailed other Japanese financials. For dividend investors, this is a meaningful quality signal that rarely appears in English-language research.

みんかぶ analyst consensus: On みんかぶ (Minkabu), domestic analysts set a consensus fair-value estimate of ¥1,550 for Mizuho Leasing — implying approximately 16% upside from the May 2026 price of ¥1,331. This aligns with the PBR-below-1 undervaluation thesis and the TSE’s ongoing push for improved capital efficiency.

The ¥1,550 みんかぶ consensus, combined with the PBR of 0.89x, reinforces the view that the stock is priced for pessimism — making the 3.8–4.3% yield available at a discount to intrinsic value rather than as a value trap signal.

四季報 FY2027 forecast: The Shikiho projects FY2027 net profit attributable to parent of ¥52 billion (+9.2% YoY), with ordinary profit rising 3.1% to ¥67 billion. Operating profit is projected to decline a further 10.5% to ¥40 billion — confirming that margin pressure from rising rates is a multi-year, not one-off, headwind.

Strategic Developments: New Alliances and US Expansion

In May 2026, Nippon Steel Kowa Real Estate agreed to acquire an 8.70% stake in Mizuho Leasing, signaling a new strategic capital alliance. Separately, the company announced plans to expand into the US market — a meaningful step for a domestically-focused leasing firm.

Mizuho Leasing also announced a third-party allotment of shares to Mizuho Financial Group (approximately ¥46 billion) to enhance capital and risk-taking capacity. This strengthens the parent-group relationship and provides firepower for the new Medium-Term Management Plan 2028.

The Medium-Term Management Plan 2028 targets portfolio transformation toward fee-based services, asset management, and overseas M&A — reducing reliance on traditional spread-based domestic leasing income over time.

Peer Context: Fuyo General Lease and Mitsubishi HC Capital

Fuyo General Lease (8424) is affiliated with the Fuyo keiretsu, anchored by Mizuho Bank and Marubeni. Its ~3.78% yield comes with a 30.2% payout ratio — among the most conservative in the group. Fuyo’s Japanese-language IR disclosures show a mid-term plan focused on IT leasing and green energy asset financing.

Mitsubishi HC Capital (8593) holds the longest consecutive dividend growth streak in this peer group. It was formed through the 2021 merger of Mitsubishi UFJ Lease & Finance and Hitachi Capital. Its global operations span aviation finance, infrastructure, and environmental assets. Filings are available on EDINET in both Japanese and English.

For US investors who want the most defensive option in the cohort, Mitsubishi HC Capital’s global diversification reduces Japan-only concentration risk. Fuyo General Lease suits investors who prioritize the lowest payout ratio. Mizuho Leasing offers the highest forward yield among the three.

The US Investor’s Practical Checklist

Before adding any of these names, US investors should run through four practical checks.

1. Currency exposure. All dividends are paid in JPY. A 4% yield in JPY can become 2–3% in USD terms if the yen weakens. Factor FX into your total return model, not just the headline yield.

2. Withholding tax. Japan withholds 15% on dividends for US investors. You can reclaim this via IRS Form 1116 (foreign tax credit). Hold in a taxable account, not an IRA, to make use of the credit.

3. Liquidity. These are mid-cap Japanese financials. Daily trading volume is lower than US large-caps. Use limit orders and be patient on fills.

4. Broker access. Not all US brokers offer TSE-listed stocks. Interactive Brokers (IBKR) is the most reliable option for direct TSE access from the US. You can screen and track 8425 using TradingView, which covers TSE-listed stocks with full charting tools.

Risks and Counter-View

No investment case is complete without a genuine stress-test. Here are three reasons a reasonable investor might pass on this sector.

1. Rising Japanese interest rates. The Bank of Japan’s gradual exit from ultra-loose policy raises funding costs for leasing companies, which borrow short and lend long. Spread compression is the primary earnings risk. Mizuho Leasing’s operating profit already fell 8.8% YoY in FY2026, and 四季報 projects a further 10.5% decline in FY2027.

2. JPY depreciation risk. A continued weak yen erodes USD-denominated returns even if JPY dividends grow. A 10% yen depreciation wipes out more than two years of dividend growth at current payout levels.

3. Accounting complexity. US investors unfamiliar with Japanese GAAP equivalents may misread leverage ratios. Always check the EDINET filing footnotes before drawing conclusions from screener data alone.

Bottom Line — Author’s View: Constructive on Mizuho Leasing (8425)

Mizuho Leasing is not exciting. That is precisely the point.

At ¥1,331/share, the stock trades at PBR 0.89x and P/E 7.83x — both below sector and market averages. The forward yield of ~4.28% is backed by a ~30% payout ratio and FY2026 record net profit of ¥47.6 billion. The みんかぶ analyst consensus fair-value estimate of ¥1,550 implies ~16% price upside on top of the yield.

The dividend picture requires one honest clarification: the split-adjusted annual dividend was flat at ¥51/share for both FY2024 and FY2025. This is not a multi-decade unbroken growth streak in the traditional Dividend Aristocrat sense. It is, however, a stable and well-covered dividend with a credible upward trajectory — ¥52/share projected for FY2027 — supported by record earnings and a conservative payout framework.

The author’s view is constructive: the combination of sub-book valuation, 4%+ forward yield, record profitability, and strong institutional backing from Mizuho Financial Group makes 8425 worth a position in a diversified Japan dividend sleeve. Size to account for JPY volatility and monitor operating margin trends closely.

Frequently Asked Questions

Q: What is Mizuho Leasing’s current dividend yield and is it sustainable?

A: At ¥1,331/share (May 2026), the trailing yield is 3.83% and the forward yield is approximately 4.28% (based on a projected ¥52/share dividend for FY2027). With a ~30% payout ratio and FY2026 record net profit of ¥47.6 billion, the dividend is well-covered by earnings. The primary sustainability risk is BOJ rate hikes compressing operating margins.

Q: Has Mizuho Leasing consistently grown its dividend every year?

A: Not on a strict annual-increase basis in recent years. The split-adjusted annual dividend was ¥51/share for both FY2024 (ended March 2024) and FY2025 (ended March 2025) — flat, not growing, over that period. The company announced a lifted final dividend for FY2026 and 四季報 projects ¥52/share for FY2027. The trajectory is upward but measured, not an unbroken streak.

Q: How much Japanese withholding tax applies to these dividends for US investors?

A: Japan withholds 15% on dividends paid to US investors. You can reclaim this via IRS Form 1116 (foreign tax credit) on your annual return. Hold in a taxable brokerage account — the foreign tax credit cannot be used inside an IRA, so you permanently lose that 15% in a retirement account.

Q: Why does negative free cash flow not disqualify Mizuho Leasing as a dividend investment?

A: Leasing companies front-load capital expenditure to acquire assets, creating a structural timing mismatch between cash outflows and multi-year lease income. FCF is negative by design. The correct sustainability metrics are ROE and payout ratio — Mizuho Leasing’s ~30% payout ratio confirms the dividend is earnings-funded, not balance-sheet-funded.

Q: Can I hold Mizuho Leasing (8425) in my IRA?

A: Technically yes — IBKR supports TSE stocks in IRA accounts. However, the 15% Japanese withholding tax cannot be offset by a foreign tax credit inside an IRA, making a taxable account more tax-efficient for Japanese dividend stocks.

How to Buy 8425 (Mizuho Leasing) from the U.S.

Mizuho Leasing trades on the Tokyo Stock Exchange Prime Market under ticker 8425. There is no US-listed ADR, so investors must access the TSE directly. The stock trades in standard 100-share lots.

International investors can access 8425 through:

• Interactive Brokers (IBKR) — direct TSE access, low FX spread, strong for US-based investors; supports both taxable and IRA accounts
• Saxo Bank — full TSE coverage, preferred for Singapore/Europe-based investors
• Webull — accessible for smaller investors; verify TSE availability before opening an account

You can track price history and screen the leasing sector using TradingView, which covers TSE-listed stocks with full charting and technical analysis tools.

Note for US tax purposes: Japanese dividend withholding is 15%. Claim the foreign tax credit on IRS Form 1116. For maximum tax efficiency, hold in a taxable account rather than an IRA.

Account opening eligibility varies by country and broker. I am not affiliated with any of these brokers; this is general information only.

Last updated: May 2026. This article is for educational purposes only and does not constitute investment advice. Opinions are my own, not investment advice. I does not currently hold positions in the securities mentioned. All figures should be independently verified before making any investment decision. FTC 16 CFR Part 255: see full Disclaimer.