Steel Stock High Dividend Comparison: Selecting Nippon Steel, JFE, and Kobe Steel Across 3 Axes
A triple threat of excessive Chinese exports, U.S. import tariffs, and rising logistics costs continues. For the fiscal year ending March 2026, all three major blast furnace companies are forecasting profit declines. Nevertheless, some companies have set a minimum dividend to protect payouts. I compared these stocks across three axes to see which ones have the 'will not to cut dividends even in adversity'.
Organizing the positioning of the three steel companies
First, let's organize the current status of the three companies.
Nippon Steel (5401) is the largest domestic manufacturer and the world's fourth-largest in terms of crude steel production. In October 2025, it split its stock 5-for-1, broadening its base of individual investors. The annual dividend per share for the fiscal year ending March 2026 is 24 yen (post-split). Starting from that period, the company has explicitly stated a 'minimum dividend of 24 yen' in its 2030 medium-to-long-term plan, taking the stance that it will maintain the 24 yen payout even if performance deteriorates. The dividend yield is approximately 5.7%.
JFE Holdings (5411) is the second-largest domestic blast furnace manufacturer. The dividend for the fiscal year ending March 2026 is 80 yen, a decrease from the previous period's 100 yen. However, the company has clearly stated 'a minimum of 80 yen per share' in its dividend policy, showing its intention to stop the decline there. I hold this stock in fractional shares.
Kobe Steel (5406) is a diversified manufacturer that owns not only steel but also power and machinery businesses. The dividend for the fiscal year ending March 2025 is forecast at 90 yen. There is no explicit minimum dividend, and among the three companies, its dividend policy is positioned as relatively less stable.
Axis 1: Dividend yield and the presence of a minimum dividend
When choosing high-dividend stocks, I first check the 'yield.' However, whether that figure will continue next year and the year after is just as important.
Nippon Steel's yield is approximately 5.7%. With the 5-for-1 stock split, the number of shareholders reached approximately 980,000 as of 2026, and individual investor attention is rising. By explicitly stating a minimum dividend of 24 yen, the message is that 'even if performance is poor, we will protect the 24 yen'.
JFE cut its dividend from 100 yen to 80 yen for the fiscal year ending March 2026. It is natural to view 80 yen as the floor. Although the dividend payout ratio is high at approximately 68%, by explicitly stating a minimum, there is a sense of security that 'this is the bottom line.' If performance recovers, there is a possibility that it will return to 100 yen or more.
Kobe Steel's yield level is comparable to the other two companies, but because there is no minimum dividend setting, one must factor in the risk that dividends will be cut if performance deteriorates. The fact that the dividend payout ratio is comfortable at approximately 34% is a point that can be evaluated.
Axis 2: Reasons for being able to protect dividends even with profit declines
All three companies are forecasting profit declines for the fiscal year ending March 2026. There are three common headwinds in the background.
The real estate recession and overproduction within China continue, and low-priced steel materials are flowing into the international market. The strengthening of U.S. tariffs on imported steel is also adding to the pressure. Furthermore, rising domestic and international logistics costs are squeezing the profits of each company.
The reason they can protect dividends even amidst this triple threat lies in their financial strength. Nippon Steel's overseas operations in India and North America support its earnings. JFE is compensating for the decline in domestic market conditions through overseas expansion, including in the Middle East. Kobe Steel's power and industrial machinery businesses are mitigating the downside of its steel business.
From the perspective of the dividend payout ratio, the situation of the three companies differs. JFE is high at approximately 68%, and while its stance on dividends is strong, caution is required regarding sustainability. Nippon Steel is at approximately 45%, leaving room for dividend increases. Kobe Steel is the lowest at approximately 34%, a level that holds expectations for dividend increases when performance recovers.
Axis 3: Differences in revenue structure and depth of diversification
Nippon Steel is a 'pure steel company.' Its strengths are blast furnace technology and a global production system. Its performance is easily linked to steel market conditions, but it has growth axes such as business expansion in India.
JFE is primarily a steel business, but it also has engineering and trading company functions. Its revenue structure is close to that of Nippon Steel, and the volatility of its performance is similar. The commitment to a minimum return of 80 yen underpins investor confidence.
Kobe Steel has the most diverse revenue sources among the three companies. Its power and machinery businesses act as a buffer when the steel business is in the red. However, conversely, there is an aspect where the benefits are limited even if steel market conditions improve. This is one of the reasons why its yield is unlikely to become exceptionally high.
As a result of comparing them across 3 criteria, the stock I have chosen is
I currently hold JFE Holdings (5411). There are three reasons for my choice.
First, it clearly states a minimum dividend of 80 yen. Although they reduced the dividend from 100 yen to 80 yen for the fiscal year ending March 2026, having a specific figure that they commit to maintaining serves as a pillar for long-term holding. Second, the dividend yield is stable at the 4-5% level. And third, within the cyclical steel sector, it continues to be evaluated as having a strong willingness to return capital to shareholders.
I appreciate that Nippon Steel has become easier to buy after its 5-for-1 stock split and that it has established a new minimum dividend of 24 yen. However, like JFE, its performance is heavily influenced by steel market conditions. In my case, I am maintaining my current position in JFE and making decisions while monitoring the situation.
Kobe Steel is an interesting company due to its diversification, but I am concerned that its dividend policy is slightly less clear. If choosing based on dividends, I feel that Nippon Steel or JFE, which clearly state their minimums, have the advantage.
Steel stocks cannot escape the fate of being in a cyclical sector. However, if you choose from the perspective of companies that have set a minimum dividend and shown the will to protect it, they can serve as a pillar for long-term holding. If you are interested in the three major steel companies, please check the dividend policy section of their IR materials.
As part of my comparison article series, please also take a look at the article where I chose insurance stocks (Tokio Marine, MS&AD, SOMPO) based on 3 criteria. I have written specifically about the background of how they increased dividends even in adverse conditions.
https://note.com/tenkin_ri_man/n/nfd360cb3fe6b
I have written a detailed individual analysis of Nippon Steel (5401) in a separate article. I have summarized the dividend trends and the history of their shareholder returns.
https://note.com/tenkin_ri_man/n/n2a7030d17580
