Hingham Institution for Savings (NASDAQ:HIFS) Is Due To Pay A Dividend Of $0.63

The board of Hingham Institution for Savings (NASDAQ:HIFS) has announced that it will pay a dividend of $0.63 per share on the 12th of November. This payment means the dividend yield will be 0.9%, which is below the average for the industry.

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Hingham Institution for Savings' Payment Expected To Have Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end.

Having distributed dividends for at least 10 years, Hingham Institution for Savings has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Hingham Institution for Savings' latest earnings report puts its payout ratio at 12%, showing that the company can pay out its dividends comfortably.

Looking forward, EPS could fall by 0.4% if the company can't turn things around from the last few years. If the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 13%, which is definitely feasible to continue.

Check out our latest analysis for Hingham Institution for Savings

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the dividend has gone from $2.12 total annually to $2.52. This works out to be a compound annual growth rate (CAGR) of approximately 1.7% a year over that time. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment.

The Dividend's Growth Prospects Are Limited

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Unfortunately, Hingham Institution for Savings' earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.

Our Thoughts On Hingham Institution for Savings' Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Hingham Institution for Savings has been making. We would be a touch cautious of relying on this stock primarily for the dividend income.

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. Just as an example, we've come across 2 warning signs for Hingham Institution for Savings you should be aware of, and 1 of them is a bit concerning. Looking for more high-yielding dividend ideas? Try our collection of 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.