Yahoo Finance Brookline Bancorp (NASDAQ:BRKL) Has Announced A Dividend Of $0.135
Brookline Bancorp, Inc. (NASDAQ:BRKL) will pay a dividend of $0.135 on the 24th of May. This makes the dividend yield 6.5%, which will augment investor returns quite nicely.
View our latest analysis for Brookline Bancorp
Brookline Bancorp's Earnings Will Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much.
Having distributed dividends for at least 10 years, Brookline Bancorp has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 58%, which means that Brookline Bancorp would be able to pay its last dividend without pressure on the balance sheet.
Over the next year, EPS is forecast to expand by 11.4%. If the dividend continues along recent trends, we estimate the future payout ratio will be 56%, which is in the range that makes us comfortable with the sustainability of the dividend.
Brookline Bancorp Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from $0.34 total annually to $0.54. This means that it has been growing its distributions at 4.7% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
Brookline Bancorp May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. It's not great to see that Brookline Bancorp's earnings per share has fallen at approximately 3.3% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. 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.
In Summary
Overall, a consistent dividend is a good thing, and we think that Brookline Bancorp has the ability to continue this into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Brookline 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.
