Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
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. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase Home Federal Bancorp of Louisiana's shares before the 26th of January in order to receive the dividend, which the company will pay on the 12th of February.
The company's next dividend payment will be US$0.13 per share, and in the last 12 months, the company paid a total of US$0.50 per share. Based on the last year's worth of payments, Home Federal Bancorp of Louisiana has a trailing yield of 3.6% on the current stock price of $14.04. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for Home Federal Bancorp of Louisiana
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Home Federal Bancorp of Louisiana paid out a comfortable 28% of its profit last year.
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?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Home Federal Bancorp of Louisiana's earnings per share have been growing at 12% a year for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Home Federal Bancorp of Louisiana has delivered an average of 15% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
To Sum It Up
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. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Home Federal Bancorp of Louisiana looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
So while Home Federal Bancorp of Louisiana looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. 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.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.
