Yahoo Finance Hanover Bancorp (NASDAQ:HNVR) Is Paying Out A Dividend Of $0.10
The board of Hanover Bancorp, Inc. (NASDAQ:HNVR) has announced that it will pay a dividend of $0.10 per share on the 15th of May. Including this payment, the dividend yield on the stock will be 2.4%, which is a modest boost for shareholders' returns.
View our latest analysis for Hanover Bancorp
Hanover Bancorp's Earnings Will Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive.
Hanover Bancorp is just starting to establish itself as being able to pay dividends to shareholders, given its short 2-year history of distributing earnings. Despite the company's shorter dividend history however, calculating for its payout ratio of 20% shows that Hanover Bancorp is able to comfortably pay dividends.
Looking forward, earnings per share is forecast to rise by 18.9% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 17%, which is in the range that makes us comfortable with the sustainability of the dividend.
Hanover Bancorp Doesn't Have A Long Payment History
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. There hasn't been much of a change in the dividend over the last 2 years. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.
Dividend Growth May Be Hard To Achieve
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. In the last five years, Hanover Bancorp's earnings per share has shrunk at approximately 2.5% per annum. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
Our Thoughts On Hanover Bancorp's Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Hanover Bancorp's payments, as there could be some issues with sustaining them into the future. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Hanover Bancorp has been making. We don't think Hanover Bancorp is a great stock to add to your portfolio if income is your focus.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Hanover Bancorp that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
