First Hawaiian's (NASDAQ:FHB) Dividend Will Be $0.26
The board of First Hawaiian, Inc. (NASDAQ:FHB) has announced that it will pay a dividend of $0.26 per share on the 1st of September. This means the annual payment is 5.0% of the current stock price, which is above the average for the industry.
View our latest analysis for First Hawaiian
First Hawaiian's Payment Expected To Have Solid Earnings Coverage
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Having paid out dividends for 7 years, First Hawaiian has a good history of paying out a part of its earnings to shareholders. Based on First Hawaiian's last earnings report, the payout ratio is at a decent 48%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next 3 years, EPS is forecast to fall by 17.7%. However, as estimated by analysts, the future payout ratio could be 58% over the same time period, which we think the company can easily maintain.
First Hawaiian Is Still Building Its Track Record
It is great to see that First Hawaiian has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The annual payment during the last 7 years was $0.80 in 2016, and the most recent fiscal year payment was $1.04. This means that it has been growing its distributions at 3.8% per annum over that time. First Hawaiian hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.
First Hawaiian Could Grow Its Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. First Hawaiian has impressed us by growing EPS at 7.9% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
In Summary
Overall, a consistent dividend is a good thing, and we think that First Hawaiian has the ability to continue this into the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for First Hawaiian (1 is concerning!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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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