Finward Bancorp (NASDAQ:FNWD) Has Affirmed Its Dividend Of US$0.31

Finward Bancorp's (NASDAQ:FNWD) investors are due to receive a payment of US$0.31 per share on 7th of January. This makes the dividend yield 2.6%, which will augment investor returns quite nicely.

See our latest analysis for Finward Bancorp

Finward Bancorp's Earnings Easily Cover the Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, prior to this announcement, Finward Bancorp's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 7.7% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 27%, which is in the range that makes us comfortable with the sustainability of the dividend.

Finward Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2011, the first annual payment was US$0.60, compared to the most recent full-year payment of US$1.24. This implies that the company grew its distributions at a yearly rate of about 7.5% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Finward Bancorp has impressed us by growing EPS at 7.7% per year over the past five years. Finward Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Finward Bancorp Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Now, if you want to look closer, it would be worth checking out our free research on Finward Bancorp management tenure, salary, and performance. We have also put together a list of global stocks with a solid dividend.

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.

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