Hanmi Financial Corporation (NASDAQ:HAFC) Will Pay A US$0.10 Dividend In Four Days

Hanmi Financial Corporation (NASDAQ:HAFC) is about to trade ex-dividend in the next four days. You will need to purchase shares before the 5th of February to receive the dividend, which will be paid on the 24th of February.

Hanmi Financial's next dividend payment will be US$0.10 per share, and in the last 12 months, the company paid a total of US$0.32 per share. Based on the last year's worth of payments, Hanmi Financial has a trailing yield of 2.9% on the current stock price of $13.82. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Hanmi Financial

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Hanmi Financial paid out a comfortable 37% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. So we're not too excited that Hanmi Financial's earnings are down 3.8% a year over the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past seven years, Hanmi Financial has increased its dividend at approximately 5.2% a year on average.

The Bottom Line

Has Hanmi Financial got what it takes to maintain its dividend payments? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

With that being said, if dividends aren't your biggest concern with Hanmi Financial, you should know about the other risks facing this business. In terms of investment risks, we've identified 2 warning signs with Hanmi Financial and understanding them should be part of your investment process.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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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