Kearny Financial (NASDAQ:KRNY) Will Pay A Dividend Of $0.11
Kearny Financial Corp.'s (NASDAQ:KRNY) investors are due to receive a payment of $0.11 per share on 24th of May. Based on this payment, the dividend yield on the company's stock will be 5.7%, which is an attractive boost to shareholder returns.
Check out our latest analysis for Kearny Financial
Kearny Financial's Earnings Will Easily Cover The Distributions
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
Having paid out dividends for 8 years, Kearny Financial has a good history of paying out a part of its earnings to shareholders. Based on Kearny Financial's last earnings report, the payout ratio is at a decent 72%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, earnings per share is forecast to rise by 23.6% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 74% by next year, which is in a pretty sustainable range.
Kearny Financial's Dividend Has Lacked Consistency
Even in its relatively short history, the company has reduced the dividend at least once. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The annual payment during the last 8 years was $0.08 in 2015, and the most recent fiscal year payment was $0.44. This implies that the company grew its distributions at a yearly rate of about 24% over that duration. Kearny Financial has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Kearny Financial has been growing its earnings per share at 24% a year over the past five years. However, Kearny Financial isn't reinvesting a lot back into the business, so we wonder how quickly it will be able to grow in the future.
Kearny Financial Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Kearny Financial might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for Kearny Financial that investors should take into consideration. 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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