Hingham Institution for Savings (NASDAQ:HIFS) Will Pay A Dividend Of $0.63

The board of Hingham Institution for Savings (NASDAQ:HIFS) has announced that it will pay a dividend on the 7th of August, with investors receiving $0.63 per share. This payment means the dividend yield will be 1.2%, which is below the average for the industry.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Hingham Institution for Savings' stock price has increased by 31% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

Check out our latest analysis for Hingham Institution for Savings

Hingham Institution for Savings' Dividend Forecasted To Be Well Covered By Earnings

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

Hingham Institution for Savings has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Hingham Institution for Savings' last earnings report, the payout ratio is at a decent 27%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Unless the company can turn things around, EPS could fall by 8.9% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio could be 32%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2014, the annual payment back then was $1.35, compared to the most recent full-year payment of $2.52. This implies that the company grew its distributions at a yearly rate of about 6.4% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

Dividend Growth Is Doubtful

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Hingham Institution for Savings has seen earnings per share falling at 8.9% per year over the last five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed.

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 don't think Hingham Institution for Savings is a great stock to add to your portfolio if income is your focus.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 2 warning signs for Hingham Institution for Savings (of which 1 can't be ignored!) you should know about. Is Hingham Institution for Savings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com