Hope Bancorp (NASDAQ:HOPE) Is Due To Pay A Dividend Of $0.14
The board of Hope Bancorp, Inc. (NASDAQ:HOPE) has announced that it will pay a dividend of $0.14 per share on the 17th of August. The dividend yield will be 5.3% based on this payment which is still above the industry average.
View our latest analysis for Hope Bancorp
Hope Bancorp's Earnings Will Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much.
Having distributed dividends for at least 10 years, Hope Bancorp has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 37%, which means that Hope Bancorp would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share is forecast to fall by 11.6% over the next 3 years. However, as estimated by analysts, the future payout ratio could be 45% over the same time period, which we think the company can easily maintain.
Hope Bancorp Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.20, compared to the most recent full-year payment of $0.56. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
Dividend Growth May Be Hard To Achieve
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, Hope Bancorp has only grown its earnings per share at 4.9% per annum over the past five years. While EPS growth is quite low, Hope Bancorp has the option to increase the payout ratio to return more cash to shareholders.
Hope Bancorp Looks Like A Great Dividend Stock
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. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.
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 Hope Bancorp that investors need to be conscious of moving forward. 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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