Why You Might Be Interested In HarborOne Bancorp, Inc. (NASDAQ:HONE) For Its Upcoming Dividend
It looks like HarborOne Bancorp, Inc. (NASDAQ:HONE) is about to go ex-dividend in the next 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase HarborOne Bancorp's shares before the 3rd of January in order to receive the dividend, which the company will pay on the 18th of January.
The company's next dividend payment will be US$0.05 per share. Last year, in total, the company distributed US$0.20 to shareholders. Based on the last year's worth of payments, HarborOne Bancorp has a trailing yield of 1.3% on the current stock price of $14.89. If you buy this business for its dividend, you should have an idea of whether HarborOne Bancorp's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for HarborOne Bancorp
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. HarborOne Bancorp paid out just 15% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. That's why it's comforting to see HarborOne Bancorp's earnings have been skyrocketing, up 90% per annum for the past five years.
Unfortunately HarborOne Bancorp has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
Final Takeaway
Has HarborOne 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 is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. HarborOne Bancorp 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.
In light of that, while HarborOne Bancorp has an appealing dividend, it's worth knowing the risks involved with this stock. Be aware that HarborOne Bancorp is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
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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.
