HarborOne Bancorp (NASDAQ:HONE) Is Due To Pay A Dividend Of $0.075

HarborOne Bancorp, Inc.'s (NASDAQ:HONE) investors are due to receive a payment of $0.075 per share on 30th of October. This means the annual payment will be 3.2% 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

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

HarborOne Bancorp has a short history of paying out dividends, with its current track record at only 3 years. Based on HarborOne Bancorp's last earnings report, calculating for its payout ratio equates to 34%, which means that the company covered its last dividend with comfortable room to spare.

Over the next year, EPS is forecast to fall by 36.6%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 57%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

HarborOne Bancorp Is Still Building Its Track Record

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 works out to be a compound annual growth rate (CAGR) of approximately 36% a year 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

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that HarborOne Bancorp has grown earnings per share at 36% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like HarborOne Bancorp's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for HarborOne Bancorp (1 is potentially serious!) that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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