IF Bancorp (NASDAQ:IROQ) Has Announced A Dividend Of $0.20

The board of IF Bancorp, Inc. (NASDAQ:IROQ) has announced that it will pay a dividend of $0.20 per share on the 13th of October. This means the annual payment will be 2.6% of the current stock price, which is lower than the industry average.

Check out our latest analysis for IF Bancorp

IF 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.

IF Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past records don't necessarily translate into future results, the company's payout ratio of 25% also shows that IF Bancorp is able to comfortably pay dividends.

Looking forward, earnings per share could rise by 26.0% 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 23% by next year, which we think can be pretty sustainable going forward.

IF Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.10, compared to the most recent full-year payment of $0.40. This means that it has been growing its distributions at 15% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that IF Bancorp has grown earnings per share at 26% 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 IF 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 easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for IF Bancorp that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.