Amalgamated Financial (NASDAQ:AMAL) Is Due To Pay A Dividend Of $0.10

Amalgamated Financial Corp. (NASDAQ:AMAL) will pay a dividend of $0.10 on the 22nd of August. This means the annual payment will be 2.0% of the current stock price, which is lower than the industry average.

See our latest analysis for Amalgamated Financial

Amalgamated Financial's Earnings Will Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Amalgamated Financial has a good history of paying out dividends, with its current track record at 5 years. While past records don't necessarily translate into future results, the company's payout ratio of 14% also shows that Amalgamated Financial is able to comfortably pay dividends.

Over the next 3 years, EPS is forecast to fall by 2.3%. Fortunately, analysts forecast the future payout ratio to be 19% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

Amalgamated Financial Is Still Building Its Track Record

Amalgamated Financial's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 5 years was $0.24 in 2018, and the most recent fiscal year payment was $0.40. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Amalgamated Financial has grown earnings per share at 33% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Amalgamated Financial Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. To that end, Amalgamated Financial has 2 warning signs (and 1 which is significant) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.