HarborOne Bancorp (NASDAQ:HONE) Has Affirmed Its Dividend Of $0.075

The board of HarborOne Bancorp, Inc. (NASDAQ:HONE) has announced that it will pay a dividend of $0.075 per share on the 18th of January. This means the annual payment will be 2.5% of the current stock price, which is lower than the industry average.

See our latest analysis for HarborOne Bancorp

HarborOne Bancorp's Payment Expected To Have Solid Earnings Coverage

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

Having paid out dividends for only 3 years, HarborOne Bancorp does not have much of a history being a dividend paying company. Based on HarborOne Bancorp's last earnings report, calculating for its payout ratio equates to 40%, which means that the company covered its last dividend with comfortable room to spare.

Looking forward, earnings per share is forecast to fall by 1.0% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 44% over the same time period, which is in a pretty comfortable range.

HarborOne Bancorp Doesn't Have A Long Payment History

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2020, the dividend has gone from $0.12 total annually to $0.30. This means that it has been growing its distributions at 36% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. HarborOne Bancorp has seen EPS rising for the last five years, at 28% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

HarborOne Bancorp Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think HarborOne Bancorp might even raise payments in the future. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 HarborOne Bancorp (of which 1 doesn't sit too well with us!) 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.