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Readers hoping to buy Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. You will need to purchase shares before the 31st of July to receive the dividend, which will be paid on the 17th of August.
Home Federal Bancorp of Louisiana's upcoming dividend is US$0.17 a share, following on from the last 12 months, when the company distributed a total of US$0.64 per share to shareholders. Calculating the last year's worth of payments shows that Home Federal Bancorp of Louisiana has a trailing yield of 2.6% on the current share price of $25. If you buy this business for its dividend, you should have an idea of whether Home Federal Bancorp of Louisiana's dividend is reliable and sustainable. As a result, readers should always check whether Home Federal Bancorp of Louisiana has been able to grow its dividends, or if the dividend might be cut.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately Home Federal Bancorp of Louisiana's payout ratio is modest, at just 27% of profit.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Home Federal Bancorp of Louisiana's earnings per share have been growing at 12% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Home Federal Bancorp of Louisiana has lifted its dividend by approximately 11% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
Should investors buy Home Federal Bancorp of Louisiana for the upcoming dividend? Companies like Home Federal Bancorp of Louisiana that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating Home Federal Bancorp of Louisiana more closely.
On that note, you'll want to research what risks Home Federal Bancorp of Louisiana is facing. To help with this, we've discovered 1 warning sign for Home Federal Bancorp of Louisiana that you should be aware of before investing in their shares.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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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