First of Long Island's (NASDAQ:FLIC) Dividend Will Be $0.21
The board of The First of Long Island Corporation (NASDAQ:FLIC) has announced that it will pay a dividend of $0.21 per share on the 19th of October. This means the annual payment is 7.5% of the current stock price, which is above the average for the industry.
View our latest analysis for First of Long Island
First of Long Island's Dividend Forecasted To Be Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
First of Long Island has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but First of Long Island's payout ratio of 53% is a good sign as this means that earnings decently cover dividends.
Looking forward, earnings per share is forecast to fall by 14.7% over the next year. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 66%, which would be comfortable for the company to continue in the future.
First of Long Island Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.444 in 2013 to the most recent total annual payment of $0.84. This implies that the company grew its distributions at a yearly rate of about 6.6% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
Dividend Growth May Be Hard To Achieve
Investors could be attracted to the stock based on the quality of its payment history. However, First of Long Island's EPS was effectively flat over the past five years, which could stop the company from paying more every year. Growth of 0.6% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.
We Really Like First of Long Island's Dividend
Overall, we like to see the dividend staying consistent, and we think First of Long Island might even raise payments in the future. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for First of Long Island that you should be aware of before investing. 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.
