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Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK) is about to go ex-dividend in just three days. This means that investors who purchase shares on or after the 11th of May will not receive the dividend, which will be paid on the 26th of May.
Northfield Bancorp (Staten Island NY)'s next dividend payment will be US$0.13 per share, on the back of last year when the company paid a total of US$0.44 to shareholders. Based on the last year's worth of payments, Northfield Bancorp (Staten Island NY) has a trailing yield of 3.1% on the current stock price of $16.83. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see Northfield Bancorp (Staten Island NY) paying out a modest 44% of its earnings.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Northfield Bancorp (Staten Island NY)'s earnings per share have been growing at 18% a year for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Northfield Bancorp (Staten Island NY) has delivered an average of 14% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
To Sum It Up
Is Northfield Bancorp (Staten Island NY) an attractive dividend stock, or better left on the shelf? Companies like Northfield Bancorp (Staten Island NY) that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Northfield Bancorp (Staten Island NY) ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 3 warning signs for Northfield Bancorp (Staten Island NY) and you should be aware of them before buying any shares.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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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