Hanover Bancorp (NASDAQ:HNVR) Will Pay A Dividend Of $0.10

Hanover Bancorp, Inc. (NASDAQ:HNVR) will pay a dividend of $0.10 on the 15th of November. Including this payment, the dividend yield on the stock will be 2.2%, which is a modest boost for shareholders' returns.

Check out our latest analysis for Hanover Bancorp

Hanover Bancorp's Earnings Will Easily Cover The Distributions

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

Currently, Hanover Bancorp does not yet have a history of paying dividends out, with this being its first year doing so. Despite Hanover Bancorp only paying out for the first time, calculating for the company's payout ratio shows a percentage of 17%, a great sign for the sustainability of the company's dividend for the future.

Looking forward, earnings per share could rise by 8.7% 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 17% by next year, which we think can be pretty sustainable going forward.

Hanover Bancorp Is Still Building Its Track Record

The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

We Could See Hanover Bancorp's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Hanover Bancorp has grown earnings per share at 8.7% per year over the past five years. Hanover Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Hanover Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Hanover Bancorp might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Hanover Bancorp that investors need to be conscious of moving forward. 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.