Hingham Institution for Savings (NASDAQ:HIFS) Is Paying Out A Dividend Of $0.63

Hingham Institution for Savings (NASDAQ:HIFS) will pay a dividend of $0.63 on the 14th of May. Including this payment, the dividend yield on the stock will be 1.1%, which is a modest boost for shareholders' returns.

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Hingham Institution for Savings' Earnings Will Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

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 19%, showing that the company can pay out its dividends comfortably.

EPS is set to fall by 2.3% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the future payout ratio could be 22%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

See our latest analysis for Hingham Institution for Savings

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was $1.36 in 2015, and the most recent fiscal year payment was $2.52. This means that it has been growing its distributions at 6.4% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Hingham Institution for Savings might have put its house in order since then, but we remain cautious.

Hingham Institution for Savings May Find It Hard To Grow The Dividend

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Over the past five years, it looks as though Hingham Institution for Savings' EPS has declined at around 2.3% a year. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.

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. While Hingham Institution for Savings is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We would probably look elsewhere for an income investment.

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. To that end, Hingham Institution for Savings has 2 warning signs (and 1 which is significant) we think you should know about. 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.