Yahoo Finance Read This Before Buying Pathfinder Bancorp, Inc. (NASDAQ:PBHC) For Its Dividend
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Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Historically, Pathfinder Bancorp, Inc. (NASDAQ:PBHC) has paid a dividend to shareholders. It currently yields 1.7%. Should it have a place in your portfolio? Let’s take a look at Pathfinder Bancorp in more detail.
View our latest analysis for Pathfinder Bancorp
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is it the top 25% annual dividend yield payer?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share risen in the past couple of years?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
How well does Pathfinder Bancorp fit our criteria?
Pathfinder Bancorp has a trailing twelve-month payout ratio of 25%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Dividend payments from Pathfinder Bancorp have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.
Relative to peers, Pathfinder Bancorp generates a yield of 1.7%, which is on the low-side for Mortgage stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Pathfinder Bancorp for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three fundamental factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for PBHC’s future growth? Take a look at our free research report of analyst consensus for PBHC’s outlook.
Valuation: What is PBHC worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PBHC is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
