Waterstone Financial Inc's Dividend Analysis
Understanding Waterstone Financial Inc's Upcoming Dividend Payout
Waterstone Financial Inc (NASDAQ:WSBF) recently announced a dividend of $0.15 per share, payable on 2024-02-01, with the ex-dividend date set for 2024-01-05. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Waterstone Financial Inc's dividend performance and assess its sustainability.
What Does Waterstone Financial Inc Do?
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Waterstone Financial Inc is a holding company. Through its subsidiaries, It operates in two segments: Community Banking and Mortgage Banking. The community banking segment provides consumer and business banking products and services to customers, which include various types of loans, deposits, and personal investment services. The Mortgage Banking segment involves residential mortgage loans for the primary purpose of sale in the secondary market. The vast majority of its revenue comes from the community banking segment.
A Glimpse at Waterstone Financial Inc's Dividend History
Waterstone Financial Inc has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Waterstone Financial Inc's Dividend Yield and Growth
As of today, Waterstone Financial Inc currently has a 12-month trailing dividend yield of 5.31% and a 12-month forward dividend yield of 4.26%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Waterstone Financial Inc's annual dividend growth rate was 18.60%. Extended to a five-year horizon, this rate increased to 19.40% per year. Based on Waterstone Financial Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Waterstone Financial Inc stock as of today is approximately 12.89%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Waterstone Financial Inc's dividend payout ratio is 1.47, which may suggest that the company's dividend may not be sustainable.
Waterstone Financial Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Waterstone Financial Inc's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Waterstone Financial Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Waterstone Financial Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Waterstone Financial Inc's revenue has increased by approximately 1.50% per year on average, a rate that underperforms approximately 77.41% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Waterstone Financial Inc's earnings decreased by approximately -13.40% per year on average, a rate that underperforms approximately 91.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.80%, which underperforms approximately 40.98% of global competitors, is a concern for future dividend sustainability.
Next Steps
In conclusion, while Waterstone Financial Inc has a history of consistent dividend payments and an impressive five-year growth rate, current metrics such as the payout ratio, profitability rank, and growth rates present a mixed picture for its dividend sustainability. Investors should weigh these factors carefully, considering the potential for a decrease in dividend payments and the company's underperformance in earnings growth relative to its peers. It is essential to monitor Waterstone Financial Inc's future earnings reports and strategic decisions to better understand the long-term prospects of its dividend payments.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
