First Financial Bancorp (NASDAQ:FFBC) Is Due To Pay A Dividend Of $0.23
First Financial Bancorp. (NASDAQ:FFBC) will pay a dividend of $0.23 on the 15th of December. This payment means that the dividend yield will be 3.6%, which is around the industry average.
Check out our latest analysis for First Financial Bancorp
First Financial Bancorp's Dividend Forecasted To Be Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
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. Based on First Financial Bancorp's last earnings report, the payout ratio is at a decent 44%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next 3 years are set to see EPS grow by 21.0%. The future payout ratio could be 37% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
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 $0.67 in 2012, and the most recent fiscal year payment was $0.92. This works out to be a compound annual growth rate (CAGR) of approximately 3.2% a year over that time. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.
The Dividend Has Growth Potential
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that First Financial Bancorp has been growing its earnings per share at 5.9% a year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
Our Thoughts On First Financial Bancorp's Dividend
Overall, we think First Financial Bancorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for First Financial Bancorp that investors should know about before committing capital to this stock. 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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