Brookline Bancorp (NASDAQ:BRKL) Is Paying Out A Dividend Of $0.135
The board of Brookline Bancorp, Inc. (NASDAQ:BRKL) has announced that it will pay a dividend on the 24th of November, with investors receiving $0.135 per share. Based on this payment, the dividend yield on the company's stock will be 6.6%, which is an attractive boost to shareholder returns.
See our latest analysis for Brookline Bancorp
Brookline Bancorp's Payment Expected To Have Solid Earnings Coverage
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having distributed dividends for at least 10 years, Brookline Bancorp has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 56%, which means that Brookline Bancorp would be able to pay its last dividend without pressure on the balance sheet.
Over the next 3 years, EPS is forecast to expand by 31.2%. Analysts forecast the future payout ratio could be 52% over the same time horizon, which is a number we think the company can maintain.
Brookline Bancorp Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the annual payment back then was $0.34, compared to the most recent full-year payment of $0.54. This works out to be a compound annual growth rate (CAGR) of approximately 4.7% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
Brookline Bancorp May Find It Hard To Grow The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. Brookline Bancorp hasn't seen much change in its earnings per share over the last five years. Growth of 1.2% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This could mean the dividend doesn't have the growth potential we look for going into the future.
We should note that Brookline Bancorp has issued stock equal to 15% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.
Brookline Bancorp Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Brookline Bancorp might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Brookline Bancorp that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
