Yahoo Finance Hingham Institution for Savings (NASDAQ:HIFS) Is Paying Out A Dividend Of $0.63
Hingham Institution for Savings' (NASDAQ:HIFS) investors are due to receive a payment of $0.63 per share on 15th of May. This means the annual payment will be 1.5% of the current stock price, which is lower than the industry average.
See our latest analysis for Hingham Institution for Savings
Hingham Institution for Savings' Dividend Forecasted To Be Well Covered By Earnings
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.
Having distributed dividends for at least 10 years, Hingham Institution for Savings has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Hingham Institution for Savings' latest earnings report puts its payout ratio at 22%, showing that the company can pay out its dividends comfortably.
EPS is set to fall by 5.0% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the future payout ratio could be 26%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2014, the annual payment back then was $1.31, compared to the most recent full-year payment of $2.52. This implies that the company grew its distributions at a yearly rate of about 6.8% over that duration. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.
Dividend Growth Is Doubtful
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's not great to see that Hingham Institution for Savings' earnings per share has fallen at approximately 5.0% per year over the past five years. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth.
In Summary
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Hingham Institution for Savings has been making. This company is not in the top tier of income providing stocks.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 2 warning signs for Hingham Institution for Savings you should be aware of, and 1 of them is concerning. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
