Yahoo Finance Brookline Bancorp (NASDAQ:BRKL) Has Affirmed Its Dividend Of $0.135
The board of Brookline Bancorp, Inc. (NASDAQ:BRKL) has announced that it will pay a dividend on the 26th of May, with investors receiving $0.135 per share. The dividend yield will be 5.7% based on this payment which is still above the industry average.
Check out our latest analysis for Brookline Bancorp
Brookline Bancorp's Payment Expected To Have Solid Earnings Coverage
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having distributed dividends for at least 10 years, Brookline Bancorp has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Brookline Bancorp's payout ratio of 46% is a good sign as this means that earnings decently cover dividends.
Looking forward, earnings per share is forecast to rise by 21.6% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 45% by next year, which is in a pretty sustainable range.
Brookline Bancorp Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the dividend has gone from $0.34 total annually to $0.54. This works out to be a compound annual growth rate (CAGR) of approximately 4.7% 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.
The Dividend Has Growth Potential
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Brookline Bancorp has been growing its earnings per share at 7.4% a year over the past five years. 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.
An additional note is that the company has been raising capital by issuing stock equal to 14% of shares outstanding in the last 12 months. Trying to grow the dividend when issuing new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividend perspective.
We Really Like Brookline Bancorp's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Brookline Bancorp that you should be aware of before investing. Is Brookline Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
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