IF Bancorp (NASDAQ:IROQ) Will Pay A Dividend Of $0.20

IF Bancorp, Inc. (NASDAQ:IROQ) has announced that it will pay a dividend of $0.20 per share on the 18th of October. The dividend yield is 2.3% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for IF Bancorp

IF Bancorp's Payment Expected To Have Solid Earnings Coverage

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

IF Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but IF Bancorp's payout ratio of 65% is a good sign as this means that earnings decently cover dividends.

Looking forward, could fall by 6.5% if the company can't turn things around from the last few years. However, if the dividend continues along recent trends, we estimate the future payout ratio could reach 81%, meaning that most of the company's earnings is being paid out to shareholders.

IF Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from $0.10 total annually to $0.40. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

Dividend Growth Is Doubtful

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, things aren't all that rosy. Over the past five years, it looks as though IF Bancorp's EPS has declined at around 6.5% a year. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed.

Our Thoughts On IF Bancorp's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about IF Bancorp's payments, as there could be some issues with sustaining them into the future. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments IF Bancorp has been making. This company is not in the top tier of income providing stocks.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 3 warning signs for IF Bancorp you should be aware of, and 1 of them is a bit concerning. 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.