Japan’s stock market is full of companies that quietly build long-term shareholder value.
Among them, dividend-growth companies stand out—businesses that steadily increase dividends year after year, backed by strong fundamentals and disciplined management.

In this article, we highlight five Japanese companies with long dividend-increase histories, solid financial strength, and stable business models.
These companies meet key criteria across:

• Fundamentals (profit quality)
  
• Cash flow stability
  
• Capital allocation
  
• Industry structure
  
• Valuation
  

And importantly, we also explain a point that often confuses foreign investors:
why negative free cash flow (FCF) in Japanese leasing companies is not a danger signal—but a normal and even healthy feature of the business model.

Let’s begin.

Comparison Table: 5 Reliable Dividend-Growth Companies

Quick Profiles of the 5 Companies

Fuyo General Lease (Fuyo Lease)

A highly disciplined and conservatively run leasing company with stable long-term earnings.

Mitsubishi HC Capital

One of the largest global leasing groups, actively expanding through overseas M&A and long-term asset growth.

Ricoh Leasing

Mid-sized but remarkably stable.
Its 26-year dividend-increase streak signals strong financial consistency.

Mizuho Leasing

Known for industry-leading ROE and efficient asset rotation.
Its banking-group background provides strong funding stability.

ORIX

A globally recognized Japanese company with diversified businesses spanning leasing, finance, energy, real estate, and infrastructure.

Why Negative FCF Is NOT a Risk for Japanese Leasing Companies

Before reviewing each company, we must address a key misunderstanding:

In manufacturing or tech industries, negative FCF often signals stress.
But leasing companies operate under a completely different financial model.

1. Leasing companies spend cash upfront

They must purchase assets first—equipment, vehicles, medical devices, IT hardware, etc.
This causes large short-term cash outflows.

2. These assets generate stable, contractual inflows for years

Over 3–7 years, customers pay:

• monthly lease fees
  
• interest margins
  
• service fees
  
• sometimes residual value
  

This means:

Negative FCF today = guaranteed future inflows tomorrow.

3. Assets retain value and can be resold

Construction equipment, vehicles, and IT hardware often have resale value.
This provides additional cash recovery at lease end.

4. Funding is stable and diversified

Leasing companies borrow from:

• megabanks
  
• corporate bonds
  
• securitization
  
• commercial paper
  

Because credit risk is low, funding is reliable—even when FCF is negative.

5. Negative FCF = business expansion, not financial danger

In leasing:

More assets → more future revenue.
Negative FCF → assets are growing → the business is expanding.

It is similar to a bank increasing its loan book.
If a leasing company stopped negative FCF, the business would shrink.

This is why Japanese leasing companies can:

• increase dividends for 20–30 years
  
• maintain ROE of 5–12%
  
• avoid financial distress
  

Negative FCF is a feature, not a flaw in their business model.

Company-by-Company Highlights

1. Fuyo General Lease (8424)

• Dividend growth: 21 years
  
• Yield: 3.78%
  
• Payout ratio: 30.2%
  
• ROE: 10.0%
  
• FCF: –112.1 bn JPY (normal asset expansion)
  

Why it’s attractive

• Disciplined, conservative management
  
• Stable earnings across cycles
  
• Healthy balance between dividends and reinvestment
  
• High credibility with investors
  

2. Mitsubishi HC Capital (8593)

• Dividend growth: 27 years
  
• Yield: 3.60%
  
• Payout ratio: 42.5%
  
• ROE: 7.8%
  
• FCF: –393.8 bn JPY (active global expansion)
  

Why it’s attractive

• One of the world’s largest leasing groups
  
• Aggressive global M&A
  
• Strong long-term earnings visibility
  
• Broad industry diversification
  

3. Ricoh Leasing (8566)

• Dividend growth: 26 years
  
• Yield: 3.18%
  
• Payout ratio: 35.4%
  
• ROE: 6.9%
  
• FCF: –12.6 bn JPY
  

Why it’s attractive

• Extremely stable earnings
  
• Low volatility vs. larger peers
  
• Very low risk of dividend cuts
  
• Quiet but solid long-term growth
  

4. Mizuho Leasing (8425)

• Dividend growth: 21 years
  
• Yield: 4.01%
  
• Payout ratio: 30% target
  
• ROE: 12.2%
  
• FCF: –244.1 bn JPY
  

Why it’s attractive

• One of the highest ROEs in the industry
  
• Backed by Mizuho Group’s strong funding base
  
• Efficient capital allocation
  
• Long runway for earnings stability
  

5. ORIX (8591)

• Dividend growth: Non-continuous
  
• Yield: 2.83%
  
• Payout ratio: 39.0%
  
• ROE: 8.8%
  
• FCF: variable
  

Why it’s attractive

• Well-known globally
  
• Multiple cash-generating businesses
  
• Strong balance sheet
  
• Diversified earnings reduce risk
  

Summary: Japan’s Dividend-Growth Companies Are “Quietly Strong”

Across these five companies, key strengths include:

• stable long-term earnings
  
• well-balanced payout ratios
  
• strong and predictable cash flows
  
• industries with low volatility
  
• high dividend sustainability
  

And most importantly：
Negative FCF in leasing companies reflects growth, not danger.

This understanding is critical for anyone evaluating Japanese income stocks.

Next Steps

In upcoming articles, we will:

• dive deeper into each of these five companies,
  
• break down their business models,
  
• analyze risks and opportunities,
  
• and compare them with U.S. dividend-growth names.
  

If you want to understand the “quiet compounding” of Japanese dividend stocks, stay tuned.

DividendDan | Japan Stocks

Independent Research on Japanese Dividend Stocks

Hi, I'm DividendDan, a Tokyo-based individual investor focused on researching Japanese dividend and value stocks. I share market insights based on publicly available data, personal research, and long-term investment perspectives to help global investors better understand the Japanese stock market. All information provided on this site is for educational purposes only and should not be considered financial advice.