First Financial Bancorp (NASDAQ:FFBC) Is Paying Out A Dividend Of $0.23
First Financial Bancorp.'s (NASDAQ:FFBC) investors are due to receive a payment of $0.23 per share on 15th of September. This means the dividend yield will be fairly typical at 4.0%.
See our latest analysis for First Financial Bancorp
First Financial Bancorp's Payment Expected To Have Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time.
Having distributed dividends for at least 10 years, First Financial Bancorp has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but First Financial Bancorp's payout ratio of 33% is a good sign as this means that earnings decently cover dividends.
EPS is set to fall by 12.4% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 40%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
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 $1.21 in 2013, and the most recent fiscal year payment was $0.92. Doing the maths, this is a decline of about 2.7% per year. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. First Financial Bancorp has impressed us by growing EPS at 11% 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.
First Financial Bancorp Looks Like A Great Dividend Stock
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 2 warning signs for First Financial Bancorp you should be aware of, and 1 of them is significant. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
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