The board of Flushing Monetary Company (NASDAQ:FFIC) has introduced that it’s going to pay a dividend on the twenty eighth of March, with buyers receiving $0.22 per share. This makes the dividend yield 6.1%, which can increase investor returns fairly properly.
Check out our latest analysis for Flushing Financial
We wish to see strong dividend yields, however that does not matter if the fee is not sustainable.
Having distributed dividends for at the very least 10 years, Flushing Monetary has an extended historical past of paying out part of its earnings to shareholders. Regardless of this historical past nonetheless, the corporate’s newest earnings report really reveals that it did not have sufficient earnings to cowl its dividends. That is an alarming signal that would imply that Flushing Monetary’s dividend at its present fee might not be sustainable for longer.
In accordance with analysts, EPS ought to be a number of occasions larger within the subsequent 3 years. In addtion, additionally they estimate the longer term payout ratio might attain 60% in the identical time interval, which we’d be comfy to see persevering with.
Even over an extended historical past of paying dividends, the corporate’s distributions have been remarkably secure. Since 2015, the dividend has gone from $0.60 complete yearly to $0.88. This suggests that the corporate grew its distributions at a yearly fee of about 3.9% over that length. Gradual and regular dividend progress may not sound that thrilling, however dividends have been secure for ten years, which we predict makes this a reasonably enticing provide.
Buyers could possibly be drawn to the inventory primarily based on the standard of its fee historical past. Nevertheless, issues aren’t all that rosy. Over the previous 5 years, it appears as if Flushing Monetary’s EPS has declined at round 13% a 12 months. Dividend funds are more likely to come underneath some strain except EPS can pull out of the nosedive it’s in. Nevertheless, the following 12 months is definitely wanting up, with earnings set to rise. We’d simply wait till it turns into a sample earlier than getting too excited.
We should always observe that Flushing Monetary has issued inventory equal to 17% of shares excellent. Repeatedly doing this may be detrimental – it is onerous to develop dividends per share when new shares are usually being created.
General, we do not suppose this firm makes an awesome dividend inventory, regardless that the dividend wasn’t reduce this 12 months. Though they’ve been constant prior to now, we predict the funds are slightly excessive to be sustained. We do not suppose Flushing Monetary is a good inventory so as to add to your portfolio if earnings is your focus.
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