In This Article:
Hingham Institution for Savings (NASDAQ:HIFS) will pay a dividend of $0.63 on the 7th of August. This payment means the dividend yield will be 1.2%, which is below the average for the industry.
View our latest analysis for Hingham Institution for Savings
Hingham Institution for Savings' Dividend Forecasted To Be Well Covered By Earnings
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.
Hingham Institution for Savings 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 Hingham Institution for Savings' payout ratio of 27% is a good sign as this means that earnings decently cover dividends.
EPS is set to fall by 8.9% over the next 12 months if recent trends continue. Assuming the dividend continues along recent trends, we believe the future payout ratio could be 32%, which we are pretty comfortable with and we think is feasible on an earnings basis.
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. Since 2014, the annual payment back then was $1.35, compared to the most recent full-year payment of $2.52. This implies that the company grew its distributions at a yearly rate of about 6.4% over that duration. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Hingham Institution for Savings might have put its house in order since then, but we remain cautious.
Dividend Growth Is Doubtful
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. Over the past five years, it looks as though Hingham Institution for Savings' EPS has declined at around 8.9% a year. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.
Our Thoughts On Hingham Institution for Savings' Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Hingham Institution for Savings' payments, as there could be some issues with sustaining them into the future. While Hingham Institution for Savings is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We would be a touch cautious of relying on this stock primarily for the dividend income.