The First of Long Island Corporation's (NASDAQ:FLIC) periodic dividend will be increasing on the 21st of October to $0.21, with investors receiving 5.0% more than last year's $0.20. This makes the dividend yield 4.5%, which is above the industry average.
First of Long Island's Dividend Forecasted To Be Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained.
First of Long Island has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 41%, which means that First of Long Island would be able to pay its last dividend without pressure on the balance sheet.
Over the next year, EPS is forecast to expand by 0.2%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 44% by next year, which is in a pretty sustainable range.
First of Long Island Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.409 in 2012, and the most recent fiscal year payment was $0.80. This implies that the company grew its distributions at a yearly rate of about 6.9% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
First of Long Island 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 of Long Island has impressed us by growing EPS at 6.9% 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.
First of Long Island Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for First of Long Island that investors should know about before committing capital to this stock. 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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