Yahoo Finance First Northwest Bancorp (NASDAQ:FNWB) Has Affirmed Its Dividend Of $0.07
The board of First Northwest Bancorp (NASDAQ:FNWB) has announced that it will pay a dividend of $0.07 per share on the 25th of November. The dividend yield is 1.8% based on this payment, which is a little bit low compared to the other companies in the industry.
Check out our latest analysis for First Northwest Bancorp
First Northwest Bancorp's 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.
Having paid out dividends for only 4 years, First Northwest Bancorp does not have much of a history being a dividend paying company. Based on its last earnings report however, the payout ratio is at a comfortable 18%, meaning that First Northwest Bancorp may be able to sustain this dividend for future years if it continues on this earnings trend.
Looking forward, EPS is forecast to rise by 80.7% over the next 3 years. Analysts forecast the future payout ratio could be 12% over the same time horizon, which is a number we think the company can maintain.
First Northwest Bancorp Is Still Building Its Track Record
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2018, the dividend has gone from $0.12 total annually to $0.28. This means that it has been growing its distributions at 24% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that First Northwest Bancorp has been growing its earnings per share at 22% a year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.
We Really Like First Northwest Bancorp's Dividend
Overall, we like to see the dividend staying consistent, and we think First Northwest Bancorp might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for First Northwest Bancorp that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
