HarborOne Bancorp's (NASDAQ:HONE) Dividend Will Be $0.08

The board of HarborOne Bancorp, Inc. (NASDAQ:HONE) has announced that it will pay a dividend on the 28th of October, with investors receiving $0.08 per share. Based on this payment, the dividend yield will be 2.6%, which is fairly typical for the industry.

See our latest analysis for HarborOne Bancorp

HarborOne Bancorp's Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Having paid out dividends for only 4 years, HarborOne Bancorp does not have much of a history being a dividend paying company. Diving into the company's earnings report, the payout ratio is set at 82%, which is a decent ratio of dividend payout to earnings, and may sustain future dividends if the company stays at its current trend.

The next year is set to see EPS grow by 47.2%. Assuming the dividend continues along the course it has been charting recently, our estimates show the future payout ratio being 74% which brings it into quite a comfortable range.

HarborOne Bancorp Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2020, the dividend has gone from $0.12 total annually to $0.32. This means that it has been growing its distributions at 28% 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.

HarborOne Bancorp Might Find It Hard To Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that HarborOne Bancorp has grown earnings per share at 11% per year over the past five years. EPS has been growing at a reasonable rate, although with most of the profits being paid out to shareholders, growth prospects could be more limited in the future.

In Summary

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. Strong earnings growth means HarborOne Bancorp has the potential to be a good dividend stock in the future, despite the current payments being at elevated levels. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 3 warning signs for HarborOne Bancorp that investors should know about before committing capital to this stock. Is HarborOne Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.