Northfield Bancorp (Staten Island NY) (NASDAQ:NFBK) Has Announced A Dividend Of $0.13

Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK) has announced that it will pay a dividend of $0.13 per share on the 23rd of November. Including this payment, the dividend yield on the stock will be 3.2%, which is a modest boost for shareholders' returns.

Check out the opportunities and risks within the US Mortgage industry.

Northfield Bancorp (Staten Island NY)'s Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Northfield Bancorp (Staten Island NY) 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 Northfield Bancorp (Staten Island NY)'s payout ratio of 38% is a good sign as this means that earnings decently cover dividends.

EPS is set to fall by 3.3% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 41% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was $0.171 in 2012, and the most recent fiscal year payment was $0.52. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. Northfield Bancorp (Staten Island NY) has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Northfield Bancorp (Staten Island NY) has impressed us by growing EPS at 11% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Northfield Bancorp (Staten Island NY)'s prospects of growing its dividend payments in the future.

We Really Like Northfield Bancorp (Staten Island NY)'s Dividend

Overall, we like to see the dividend staying consistent, and we think Northfield Bancorp (Staten Island NY) might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. To that end, Northfield Bancorp (Staten Island NY) has 3 warning signs (and 1 which can't be ignored) we think you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.