Hingham Institution for Savings (NASDAQ:HIFS) Is Increasing Its Dividend To $0.61
Hingham Institution for Savings' (NASDAQ:HIFS) dividend will be increasing from last year's payment of the same period to $0.61 on 9th of November. This takes the annual payment to 1.3% of the current stock price, which unfortunately is below what the industry is paying.
View our latest analysis for Hingham Institution for Savings
Hingham Institution for Savings' Payment Expected To Have Solid Earnings Coverage
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
Having distributed dividends for at least 10 years, Hingham Institution for Savings has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Hingham Institution for Savings' latest earnings report puts its payout ratio at 10%, showing that the company can pay out its dividends comfortably.
If the trend of the last few years continues, EPS will grow by 12.9% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 14% by next year, which we think can be pretty sustainable going forward.
Dividend Volatility
While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was $1.26 in 2012, and the most recent fiscal year payment was $3.19. This implies that the company grew its distributions at a yearly rate of about 9.7% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Hingham Institution for Savings has grown earnings per share at 13% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
We Really Like Hingham Institution for Savings' Dividend
Overall, a dividend increase is always good, and we think that Hingham Institution for Savings is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Hingham Institution for Savings that investors need to be conscious of moving forward. 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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