Brookline Bancorp (NASDAQ:BRKL) Is Paying Out A Dividend Of $0.135

The board of Brookline Bancorp, Inc. (NASDAQ:BRKL) has announced that it will pay a dividend of $0.135 per share on the 26th of May. The dividend yield will be 5.7% based on this payment which is still above the industry average.

See our latest analysis for Brookline Bancorp

Brookline Bancorp's Dividend Forecasted To Be Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained.

Brookline Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Brookline Bancorp's last earnings report, the payout ratio is at a decent 46%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next year is set to see EPS grow by 21.6%. If the dividend continues along recent trends, we estimate the future payout ratio will be 45%, which is in the range that makes us comfortable with the sustainability of the dividend.

Brookline Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.34, compared to the most recent full-year payment of $0.54. This implies that the company grew its distributions at a yearly rate of about 4.7% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

We Could See Brookline Bancorp's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Brookline Bancorp has seen EPS rising for the last five years, at 7.4% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We should note that Brookline Bancorp has issued stock equal to 14% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

We Really Like Brookline Bancorp's Dividend

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. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. As an example, we've identified 1 warning sign for Brookline Bancorp that you should be aware of before investing. Is Brookline Bancorp 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.