Kentucky First Federal Bancorp (NASDAQ:KFFB) Has Affirmed Its Dividend Of $0.10
Kentucky First Federal Bancorp (NASDAQ:KFFB) will pay a dividend of $0.10 on the 14th of November. Including this payment, the dividend yield on the stock will be 5.4%, which is a modest boost for shareholders' returns.
Check out our latest analysis for Kentucky First Federal Bancorp
Kentucky First Federal Bancorp Not Expected To Earn Enough To Cover Its Payments
If it is predictable over a long period, even low dividend yields can be attractive.
Kentucky First Federal Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions unfortunately do not guarantee future ones, and Kentucky First Federal Bancorp's last earnings report actually showed that the company went over its net earnings in its total dividend distribution. This is an alarming sign that could mean that Kentucky First Federal Bancorp's dividend at its current rate may no longer be sustainable for longer.
Over the next year, EPS could expand by 11.7% if the company continues along the path it has been on recently. Assuming the dividend continues along recent trends, we think the future payout ratio could reach 184%, which probably can't continue without starting to put some pressure on the balance sheet.
Kentucky First Federal Bancorp Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. There hasn't been much of a change in the dividend over the last 10 years. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
Kentucky First Federal Bancorp Might Find It Hard To Grow Its Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Kentucky First Federal Bancorp has impressed us by growing EPS at 12% per year over the past five years. Although per-share earnings are growing at a credible rate, the massive payout ratio may limit growth in the company's future dividend payments.
Kentucky First Federal Bancorp's Dividend Doesn't Look Sustainable
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Kentucky First Federal Bancorp's payments, as there could be some issues with sustaining them into the future. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. This company is not in the top tier of income providing stocks.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 2 warning signs for Kentucky First Federal 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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