Northeast Community Bancorp (NASDAQ:NECB) Is Paying Out A Dividend Of $0.06
Northeast Community Bancorp, Inc. (NASDAQ:NECB) will pay a dividend of $0.06 on the 8th of May. The dividend yield is 1.8% based on this payment, which is a little bit low compared to the other companies in the industry.
Check out our latest analysis for Northeast Community Bancorp
Northeast Community Bancorp's Payment Expected To Have Solid Earnings Coverage
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
Northeast Community Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Using data from its latest earnings report, Northeast Community Bancorp's payout ratio sits at 15%, an extremely comfortable number that shows that it can pay its dividend.
Looking forward, EPS is forecast to rise by 1.6% over the next 3 years. Analysts estimate the future payout ratio will be 15% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2013, the annual payment back then was $0.0896, compared to the most recent full-year payment of $0.24. This works out to be a compound annual growth rate (CAGR) of approximately 10% a year over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Northeast Community Bancorp has impressed us by growing EPS at 27% 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.
We Really Like Northeast Community Bancorp's Dividend
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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 2 warning signs for Northeast Community Bancorp (1 is concerning!) that you should be aware of before investing. 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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