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Why You Might Be Interested In IF Bancorp, Inc. (NASDAQ:IROQ) For Its Upcoming Dividend

Simply Wall St
·3 mins read

IF Bancorp, Inc. (NASDAQ:IROQ) is about to trade ex-dividend in the next 4 days. Ex-dividend means that investors that purchase the stock on or after the 24th of September will not receive this dividend, which will be paid on the 16th of October.

IF Bancorp's next dividend payment will be US$0.15 per share, and in the last 12 months, the company paid a total of US$0.30 per share. Last year's total dividend payments show that IF Bancorp has a trailing yield of 2.0% on the current share price of $15.12. If you buy this business for its dividend, you should have an idea of whether IF Bancorp's dividend is reliable and sustainable. As a result, readers should always check whether IF Bancorp has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for IF Bancorp

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. IF Bancorp is paying out just 22% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit IF Bancorp paid out over the last 12 months.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see IF Bancorp's earnings per share have risen 10% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, seven years ago, IF Bancorp has lifted its dividend by approximately 17% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Has IF Bancorp got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the 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. We think this is a pretty attractive combination, and would be interested in investigating IF Bancorp more closely.

So while IF Bancorp looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Be aware that IF Bancorp is showing 3 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.