First Financial Bancorp (NASDAQ:FFBC) Has Announced A Dividend Of $0.23
The board of First Financial Bancorp. (NASDAQ:FFBC) has announced that it will pay a dividend on the 15th of March, with investors receiving $0.23 per share. This makes the dividend yield 3.9%, which will augment investor returns quite nicely.
Check out our latest analysis for First Financial Bancorp
First Financial Bancorp's Payment Expected To Have Solid Earnings Coverage
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
First Financial Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on First Financial Bancorp's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.
EPS is set to fall by 25.4% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 41% over the same time period, which is in a pretty comfortable range.
Dividend Volatility
Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was $1.10 in 2014, and the most recent fiscal year payment was $0.92. Doing the maths, this is a decline of about 1.8% per year. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.
We Could See First Financial Bancorp's Dividend Growing
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that First Financial Bancorp has grown earnings per share at 6.7% per year over the past five years. First Financial Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
In Summary
Overall, we think First Financial Bancorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 3 warning signs for First Financial Bancorp (1 is potentially serious!) that you should be aware of before investing. Is First Financial Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.
