Provident Financial Holdings (NASDAQ:PROV) Has Affirmed Its Dividend Of $0.14

Provident Financial Holdings, Inc.'s (NASDAQ:PROV) investors are due to receive a payment of $0.14 per share on 5th of September. The dividend yield will be 4.1% based on this payment which is still above the industry average.

See our latest analysis for Provident Financial Holdings

Provident Financial Holdings' Dividend Forecasted To Be Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Provident Financial Holdings has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Provident Financial Holdings' payout ratio of 54% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS is forecast to expand by 6.8%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 52% by next year, which is in a pretty sustainable range.

Provident Financial Holdings Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $0.40, compared to the most recent full-year payment of $0.56. This works out to be a compound annual growth rate (CAGR) of approximately 3.4% a year over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

We Could See Provident Financial Holdings' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Provident Financial Holdings has seen EPS rising for the last five years, at 9.3% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Provident Financial Holdings Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Taking the debate a bit further, we've identified 1 warning sign for Provident Financial Holdings that investors need to be conscious of moving forward. Is Provident Financial Holdings not quite the opportunity you were looking for? Why not check out our selection of top 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.

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