Is Buying First Hawaiian Inc (FHB) For Its Upcoming $0.22 Dividend A Good Choice?
Shares of First Hawaiian Inc (NASDAQ:FHB) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.22 per share, investors must have owned the shares prior to 24 November 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. So if you want to cash in on FHB’s dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at FHB’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for First Hawaiian
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has it increased its dividend per share amount over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will the company be able to keep paying dividend based on the future earnings growth?
Does First Hawaiian pass our checks?
The current payout ratio for the stock is 52.51%, which means that the dividend is covered by earnings. Going forward, analysts expect FHB’s payout to remain around the same level at 53.10% of its earnings, which leads to a dividend yield of 3.26%. Moreover, EPS should increase to $1.72. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Unfortunately, it is really too early to view First Hawaiian as a dividend investment. It has only been paying out dividend for the past one year. Generally, the rule of thumb for determining whether a stock is a reliable dividend payer is that it should be consistently paying dividends for the past 10 years or more. Clearly there’s a long road ahead before we can ascertain whether FHB one as a stable dividend player. Compared to its peers, FHB has a yield of 3.12%, which is high for banks stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? If FHB is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be beneficial exploring other dividend stocks as alternatives to FHB or even look at high-growth stocks to supplement your steady income stocks. I recommend continuing your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking all the above into account, First Hawaiian is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, FHB could still offer some interesting investment opportunities. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Take a look at our latest free fundmental analysis to explore other aspects of FHB.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
