Why It Might Not Make Sense To Buy Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK) For Its Upcoming Dividend
Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK) is about to trade ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase Northfield Bancorp (Staten Island NY)'s shares before the 6th of February to receive the dividend, which will be paid on the 21st of February.
The company's next dividend payment will be US$0.13 per share, and in the last 12 months, the company paid a total of US$0.52 per share. Based on the last year's worth of payments, Northfield Bancorp (Staten Island NY) stock has a trailing yield of around 4.3% on the current share price of US$12.03. If you buy this business for its dividend, you should have an idea of whether Northfield Bancorp (Staten Island NY)'s dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
See our latest analysis for Northfield Bancorp (Staten Island NY)
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Northfield Bancorp (Staten Island NY) paid out 60% of its earnings to investors last year, a normal payout level for most businesses.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that Northfield Bancorp (Staten Island NY)'s earnings per share have remained effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Northfield Bancorp (Staten Island NY) has lifted its dividend by approximately 8.0% a year on average.
The Bottom Line
Is Northfield Bancorp (Staten Island NY) an attractive dividend stock, or better left on the shelf? Earnings per share have not grown at all, and the company pays out a bit over half its profits to shareholders. Northfield Bancorp (Staten Island NY) doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.
Ever wonder what the future holds for Northfield Bancorp (Staten Island NY)? See what the three analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
If you're in the market for strong dividend payers, we recommend checking 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.
