First Financial Bancorp (NASDAQ:FFBC) Has Announced A Dividend Of $0.23

First Financial Bancorp.'s (NASDAQ:FFBC) investors are due to receive a payment of $0.23 per share on 15th of September. This payment means that the dividend yield will be 4.4%, which is around the industry average.

View our latest analysis for First Financial Bancorp

First Financial Bancorp's Payment Expected To Have Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

First Financial Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 33%, which means that First Financial Bancorp would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to fall by 12.4%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 40%, which would be comfortable for the company to continue in the future.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of $1.21 in 2013 to the most recent total annual payment of $0.92. Doing the maths, this is a decline of about 2.7% per year. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that First Financial Bancorp has been growing its earnings per share at 11% a year over the past five years. First Financial Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like First Financial 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. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, First Financial Bancorp has 3 warning signs (and 1 which is potentially serious) we think you should know about. Is First Financial 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.