First Financial Bancorp (NASDAQ:FFBC) Is Due To Pay A Dividend Of $0.23

The board of First Financial Bancorp. (NASDAQ:FFBC) has announced that it will pay a dividend on the 17th of June, with investors receiving $0.23 per share. This makes the dividend yield 4.1%, which will augment investor returns quite nicely.

View our latest analysis for First Financial Bancorp

First Financial Bancorp's Earnings Will Easily Cover The Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much.

First Financial Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on First Financial Bancorp's last earnings report, the payout ratio is at a decent 37%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share is forecast to fall by 1.9% over the next year. But if the dividend continues along recent trends, we estimate the future payout ratio could be 40%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business 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 $0.94 in 2014 to the most recent total annual payment of $0.92. The dividend has shrunk at a rate of less than 1% a year over this period. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

We Could See First Financial Bancorp's Dividend Growing

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. We are encouraged to see that First Financial Bancorp has grown earnings per share at 5.1% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Our Thoughts On First Financial Bancorp's Dividend

Overall, we think First Financial Bancorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 3 warning signs for First Financial Bancorp (of which 1 is concerning!) 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.