Flushing Financial (NASDAQ:FFIC) Has Announced A Dividend Of $0.22

The board of Flushing Financial Corporation (NASDAQ:FFIC) has announced that it will pay a dividend of $0.22 per share on the 21st of June. This means the annual payment is 7.0% of the current stock price, which is above the average for the industry.

See our latest analysis for Flushing Financial

Flushing Financial's Dividend Forecasted To Be Well Covered By Earnings

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

Flushing Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Flushing Financial's last earnings report, the payout ratio is at a decent 93%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Earnings per share is forecast to rise by 13.8% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio could reach 83%, which is on the higher side, but certainly still feasible.

Flushing Financial Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.52 in 2014, and the most recent fiscal year payment was $0.88. This works out to be a compound annual growth rate (CAGR) of approximately 5.4% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Has Limited Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. Flushing Financial's EPS has fallen by approximately 11% per year during the past five years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.

In Summary

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Flushing Financial's payments, as there could be some issues with sustaining them into the future. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We would probably look elsewhere for an income investment.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Flushing Financial that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.