First Hawaiian (NASDAQ:FHB) Is Due To Pay A Dividend Of $0.26
The board of First Hawaiian, Inc. (NASDAQ:FHB) has announced that it will pay a dividend on the 3rd of March, with investors receiving $0.26 per share. This means the annual payment is 3.8% of the current stock price, which is above the average for the industry.
View our latest analysis for First Hawaiian
First Hawaiian'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 paid out dividends for 6 years, First Hawaiian has a good history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but First Hawaiian's payout ratio of 50% is a good sign for current shareholders as this means that earnings decently cover dividends.
Looking forward, EPS is forecast to rise by 12.5% over the next 3 years. The future payout ratio could be 46% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
First Hawaiian Is Still Building Its Track Record
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The dividend has gone from an annual total of $0.80 in 2017 to the most recent total annual payment of $1.04. This implies that the company grew its distributions at a yearly rate of about 4.5% over that duration. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.
First Hawaiian Could Grow Its Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that First Hawaiian has grown earnings per share at 9.6% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
We Really Like First Hawaiian's Dividend
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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for First Hawaiian that investors should know about before committing capital to this stock. 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.
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