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Hingham Institution for Savings (NASDAQ:HIFS) stock is about to trade ex-dividend in 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Hingham Institution for Savings investors that purchase the stock on or after the 3rd of May will not receive the dividend, which will be paid on the 15th of May.
The company's next dividend payment will be US$0.63 per share, on the back of last year when the company paid a total of US$2.52 to shareholders. Looking at the last 12 months of distributions, Hingham Institution for Savings has a trailing yield of approximately 1.5% on its current stock price of US$172.85. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Hingham Institution for Savings can afford its dividend, and if the dividend could grow.
View our latest analysis for Hingham Institution for Savings
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Hingham Institution for Savings has a low and conservative payout ratio of just 22% of its income after tax.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit Hingham Institution for Savings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that Hingham Institution for Savings's earnings are down 4.5% a year over the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Hingham Institution for Savings has delivered an average of 6.8% per year annual increase in its dividend, based on the past 10 years of dividend payments.
To Sum It Up
Is Hingham Institution for Savings an attractive dividend stock, or better left on the shelf? Hingham Institution for Savings's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.