Amalgamated Financial (NASDAQ:AMAL) Is Due To Pay A Dividend Of US$0.08

Amalgamated Financial Corp. (NASDAQ:AMAL) will pay a dividend of US$0.08 on the 1st of September. This payment means that the dividend yield will be 2.1%, which is around the industry average.

Check out our latest analysis for Amalgamated Financial

Amalgamated Financial's Dividend Is Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Amalgamated Financial's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 0.4% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 33% by next year, which is in a pretty sustainable range.

Amalgamated Financial Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2018, the first annual payment was US$0.24, compared to the most recent full-year payment of US$0.32. This means that it has been growing its distributions at 10% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Amalgamated Financial has seen EPS rising for the last five years, at 33% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like Amalgamated Financial's Dividend

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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular 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 Amalgamated Financial that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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