Northeast Community Bancorp (NASDAQ:NECB) Is Paying Out A Dividend Of $0.06

The board of Northeast Community Bancorp, Inc. (NASDAQ:NECB) has announced that it will pay a dividend on the 5th of February, with investors receiving $0.06 per share. Including this payment, the dividend yield on the stock will be 1.4%, which is a modest boost for shareholders' returns.

Check out our latest analysis for Northeast Community Bancorp

Northeast Community Bancorp's Earnings Will Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

Northeast Community Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Northeast Community Bancorp's payout ratio sits at 8.1%, an extremely comfortable number that shows that it can pay its dividend.

EPS is set to fall by 30.5% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 9.9% over the same time period, which is in a pretty comfortable range.

Northeast Community Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.0896 in 2013 to the most recent total annual payment of $0.24. This works out to be a compound annual growth rate (CAGR) of approximately 10% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Northeast Community Bancorp has impressed us by growing EPS at 34% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Northeast Community Bancorp Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Northeast Community 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Northeast Community Bancorp 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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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.