Yahoo Finance Provident Financial Holdings' (NASDAQ:PROV) Dividend Will Be US$0.14
The board of Provident Financial Holdings, Inc. (NASDAQ:PROV) has announced that it will pay a dividend of US$0.14 per share on the 2nd of September. This payment means that the dividend yield will be 3.3%, which is around the industry average.
View our latest analysis for Provident Financial Holdings
Provident Financial Holdings' Dividend Is Well Covered By Earnings
Unless the payments are sustainable, the dividend yield doesn't mean too much. Based on the last payment, Provident Financial Holdings was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.
The next year is set to see EPS grow by 5.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 55%, which is in the range that makes us comfortable with the sustainability of the dividend.
Provident Financial Holdings Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from US$0.04 in 2011 to the most recent annual payment of US$0.56. This implies that the company grew its distributions at a yearly rate of about 30% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
Dividend Growth May Be Hard To Achieve
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings have grown at around 2.4% a year for the past five years, which isn't massive but still better than seeing them shrink. The company has been growing at a pretty soft 2.4% per annum, and is paying out quite a lot of its earnings to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.
Provident Financial Holdings Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Provident Financial Holdings that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.
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.
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