SpareBank 1 Ringerike Hadeland's (OB:RING) Dividend Is Being Reduced To NOK13.10

SpareBank 1 Ringerike Hadeland (OB:RING) is reducing its dividend from last year's comparable payment to NOK13.10 on the 5th of April. Based on this payment, the dividend yield will be 4.2%, which is lower than the average for the industry.

See our latest analysis for SpareBank 1 Ringerike Hadeland

SpareBank 1 Ringerike Hadeland's Payment Expected To Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Having distributed dividends for at least 10 years, SpareBank 1 Ringerike Hadeland has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 57%, which means that SpareBank 1 Ringerike Hadeland would be able to pay its last dividend without pressure on the balance sheet.

Over the next 3 years, EPS is forecast to expand by 50.0%. The future payout ratio could be 52% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

SpareBank 1 Ringerike Hadeland Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was NOK8.00 in 2013, and the most recent fiscal year payment was NOK13.90. This implies that the company grew its distributions at a yearly rate of about 5.7% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. SpareBank 1 Ringerike Hadeland has seen EPS rising for the last five years, at 5.9% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like SpareBank 1 Ringerike Hadeland's Dividend

In general, we don't like to see the dividend being cut, especially when the company has such high potential like SpareBank 1 Ringerike Hadeland does. By reducing the dividend, pressure will be taken off the balance sheet, which could help the dividend to be consistent in the future. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. Now, if you want to look closer, it would be worth checking out our free research on SpareBank 1 Ringerike Hadeland management tenure, salary, and performance. Is SpareBank 1 Ringerike Hadeland not quite the opportunity you were looking for? Why not check out 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.