Yahoo Finance HarborOne Bancorp (NASDAQ:HONE) Is Increasing Its Dividend To $0.08
The board of HarborOne Bancorp, Inc. (NASDAQ:HONE) has announced that the dividend on 24th of April will be increased to $0.08, which will be 6.7% higher than last year's payment of $0.075 which covered the same period. Based on this payment, the dividend yield for the company will be 2.8%, which is fairly typical for the industry.
Check out our latest analysis for HarborOne Bancorp
HarborOne Bancorp's Payment Expected To Have Solid Earnings Coverage
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Having paid out dividends for only 4 years, HarborOne Bancorp does not have much of a history being a dividend paying company. Taking data from HarborOne Bancorp's last earnings report, the payout ratio is at a decent 81%, meaning that the company is able to pay out its dividend with some room to spare.
Looking forward, EPS is forecast to rise by 152.4% over the next 3 years. Analyst estimates also show the future payout ratio being 39% in the same 3 years which brings it into quite a comfortable range.
HarborOne Bancorp Is Still Building Its Track Record
The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2020, the dividend has gone from $0.12 total annually to $0.30. This works out to be a compound annual growth rate (CAGR) of approximately 26% a year 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.
HarborOne Bancorp's Dividend Might Lack Growth
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that HarborOne Bancorp has been growing its earnings per share at 14% a year over the past five years. EPS has been growing at a reasonable rate, although with most of the profits being paid out to shareholders, growth prospects could be more limited in the future.
Our Thoughts On HarborOne Bancorp's Dividend
Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. Strong earnings growth means HarborOne Bancorp has the potential to be a good dividend stock in the future, despite the current payments being at elevated levels. We don't think HarborOne 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 3 warning signs for HarborOne Bancorp that investors should take into consideration. Is HarborOne Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.
