First of Long Island (NASDAQ:FLIC) Has Announced A Dividend Of $0.21

The First of Long Island Corporation (NASDAQ:FLIC) has announced that it will pay a dividend of $0.21 per share on the 11th of January. The dividend yield will be 6.3% based on this payment which is still above the industry average.

Check out our latest analysis for First of Long Island

First of Long Island's Payment Expected To Have Solid Earnings Coverage

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

Having distributed dividends for at least 10 years, First of Long Island has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 63%, which means that First of Long Island would be able to pay its last dividend without pressure on the balance sheet.

The next 3 years are set to see EPS grow by 0.8%. Analysts forecast the future payout ratio could be 66% over the same time horizon, which is a number we think the company can maintain.

First of Long Island Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from $0.444 total annually to $0.84. This works out to be a compound annual growth rate (CAGR) of approximately 6.6% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

Dividend Growth May Be Hard To Achieve

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. In the last five years, First of Long Island's earnings per share has shrunk at approximately 3.0% per annum. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends. Earnings are predicted to grow over the next year, but we would remain cautious until a track record of earnings growth is established.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for First of Long Island that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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