Interested In Home Federal Bancorp of Louisiana's (NASDAQ:HFBL) Upcoming US$0.13 Dividend? You Have Four Days Left

It looks like Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) is about to go ex-dividend in the next four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Accordingly, Home Federal Bancorp of Louisiana investors that purchase the stock on or after the 27th of January will not receive the dividend, which will be paid on the 10th of February.

The company's next dividend payment will be US$0.13 per share, on the back of last year when the company paid a total of US$0.52 to shareholders. Based on the last year's worth of payments, Home Federal Bancorp of Louisiana stock has a trailing yield of around 4.1% on the current share price of US$12.8187. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Home Federal Bancorp of Louisiana can afford its dividend, and if the dividend could grow.

See our latest analysis for Home Federal Bancorp of Louisiana

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Home Federal Bancorp of Louisiana's payout ratio is modest, at just 46% of profit.

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

Click here to see how much of its profit Home Federal Bancorp of Louisiana paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's not ideal to see Home Federal Bancorp of Louisiana's earnings per share have been shrinking at 4.1% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Home Federal Bancorp of Louisiana has lifted its dividend by approximately 16% a year on average.

The Bottom Line

Is Home Federal Bancorp of Louisiana worth buying for its dividend? 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.

If you want to look further into Home Federal Bancorp of Louisiana, it's worth knowing the risks this business faces. Every company has risks, and we've spotted 1 warning sign for Home Federal Bancorp of Louisiana you should know about.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.