Hingham Institution for Savings (NASDAQ:HIFS) Is Increasing Its Dividend To $0.59

Hingham Institution for Savings (NASDAQ:HIFS) will increase its dividend from last year's comparable payment on the 10th of August to $0.59. Although the dividend is now higher, the yield is only 1.0%, which is below the industry average.

Check out our latest analysis for Hingham Institution for Savings

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

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

Hingham Institution for Savings has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Hingham Institution for Savings' latest earnings report puts its payout ratio at 7.3%, showing that the company can pay out its dividends comfortably.

Looking forward, earnings per share could rise by 20.4% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 9.3% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of $1.25 in 2012 to the most recent total annual payment of $3.03. This means that it has been growing its distributions at 9.3% per annum over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Hingham Institution for Savings has grown earnings per share at 20% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Hingham Institution for Savings 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Hingham Institution for Savings that investors should know about before committing capital to this stock. 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.