First Savings Financial Group (NASDAQ:FSFG) Has Announced A Dividend Of $0.15

First Savings Financial Group, Inc.'s (NASDAQ:FSFG) investors are due to receive a payment of $0.15 per share on 31st of December. The dividend yield is 2.0% based on this payment, which is a little bit low compared to the other companies in the industry.

See our latest analysis for First Savings Financial Group

First Savings Financial Group's Earnings Will Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Having distributed dividends for at least 10 years, First Savings Financial Group has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but First Savings Financial Group's payout ratio of 30% is a good sign as this means that earnings decently cover dividends.

Over the next 3 years, EPS is forecast to expand by 78.4%. The future payout ratio could be 22% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

First Savings Financial Group 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 2014, the dividend has gone from $0.147 total annually to $0.60. This means that it has been growing its distributions at 15% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. Let's not jump to conclusions as things might not be as good as they appear on the surface. Over the past five years, it looks as though First Savings Financial Group's EPS has declined at around 3.1% a year. 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. Earnings are forecast to grow over the next 12 months and if that happens we could still be a little bit cautious until it becomes a pattern.

Our Thoughts On First Savings Financial Group's Dividend

Overall, we think First Savings Financial Group is a solid choice as a dividend stock, even though the dividend wasn't raised this year. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. 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. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in First Savings Financial Group stock. Is First Savings Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.