First of Long Island (NASDAQ:FLIC) Is Paying Out A Dividend Of $0.21

The board of The First of Long Island Corporation (NASDAQ:FLIC) has announced that it will pay a dividend of $0.21 per share on the 18th of July. This makes the dividend yield 8.2%, which will augment investor returns quite nicely.

See 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.

First of Long Island has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 78%, which means that First of Long Island would be able to pay its last dividend without pressure on the balance sheet.

EPS is set to grow by 3.4% over the next year. If recent patterns in the dividend continues, the future payout ratio in 12 months could be 81% which is a bit high but can definitely be sustainable.

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 $0.462 in 2014 to the most recent total annual payment of $0.84. This works out to be a compound annual growth rate (CAGR) of approximately 6.2% 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.

Dividend Growth Is Doubtful

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately things aren't as good as they seem. First of Long Island has seen earnings per share falling at 7.9% per year over the last five years. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth. 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.

Our Thoughts On First of Long Island's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about First of Long Island's payments, as there could be some issues with sustaining them into the future. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. Overall, we don't think this company has the makings of a good income stock.

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. Are management backing themselves to deliver performance? Check their shareholdings in First of Long Island in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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