Northeast Community Bancorp (NASDAQ:NECB) Has Announced A Dividend Of $0.06
The board of Northeast Community Bancorp, Inc. (NASDAQ:NECB) has announced that it will pay a dividend on the 4th of August, with investors receiving $0.06 per share. This means the annual payment will be 1.7% of the current stock price, which is lower than the industry average.
View our latest analysis for Northeast Community Bancorp
Northeast Community Bancorp's Payment Expected To Have Solid Earnings Coverage
Even a low dividend yield can be attractive if it is sustained for years on end.
Northeast Community Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Northeast Community Bancorp's latest earnings report puts its payout ratio at 11%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to fall by 16.4% over the next year. But if the dividend continues along recent trends, we estimate the future payout ratio could be 14%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.
Dividend Volatility
The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of $0.0896 in 2013 to the most recent total annual payment of $0.24. This implies that the company grew its distributions at a yearly rate of about 10% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Northeast Community Bancorp has grown earnings per share at 36% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
Northeast Community Bancorp Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 2 warning signs for Northeast Community Bancorp (of which 1 makes us a bit uncomfortable!) you should know about. Is Northeast Community Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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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