Home Federal Bancorp of Louisiana (NASDAQ:HFBL) Will Pay A Larger Dividend Than Last Year At $0.12

Home Federal Bancorp, Inc. of Louisiana's (NASDAQ:HFBL) periodic dividend will be increasing on the 15th of August to $0.12, with investors receiving 20% more than last year's $0.10. Even though the dividend went up, the yield is still quite low at only 2.1%.

View our latest analysis for Home Federal Bancorp of Louisiana

Home Federal Bancorp of Louisiana's Dividend Forecasted To Be Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive.

Home Federal Bancorp of Louisiana has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Home Federal Bancorp of Louisiana's payout ratio sits at 24%, an extremely comfortable number that shows that it can pay its dividend.

Over the next year, EPS could expand by 11.4% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 26% by next year, which is in a pretty sustainable range.

Home Federal Bancorp of Louisiana Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the annual payment back then was $0.12, compared to the most recent full-year payment of $0.40. This means that it has been growing its distributions at 13% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Home Federal Bancorp of Louisiana has impressed us by growing EPS at 11% per year over the past five years. Home Federal Bancorp of Louisiana definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Home Federal Bancorp of Louisiana Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Home Federal Bancorp of Louisiana that you should be aware of before investing. Is Home Federal Bancorp of Louisiana not quite the opportunity you were looking for? Why not check out our selection of top 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.