First of Long Island (NASDAQ:FLIC) Is Due To Pay A Dividend Of $0.21

The First of Long Island Corporation's (NASDAQ:FLIC) investors are due to receive a payment of $0.21 per share on 20th of July. The dividend yield will be 6.9% based on this payment which is still above the industry average.

View our latest analysis for First of Long Island

First of Long Island's Earnings Will Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

First of Long Island has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but First of Long Island's payout ratio of 46% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to fall by 19.2% over the next year. But if the dividend continues along recent trends, we estimate the future payout ratio could be 61%, 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.

First of Long Island Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.444 in 2013 to the most recent total annual payment of $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.

First of Long Island May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings have grown at around 3.9% a year for the past five years, which isn't massive but still better than seeing them shrink. The company has been growing at a pretty soft 3.9% per annum, and is paying out quite a lot of its earnings to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.

First of Long Island Looks Like A Great Dividend Stock

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 distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for First of Long Island that you should be aware of before investing. 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.