HarborOne Bancorp's (NASDAQ:HONE) Dividend Will Be $0.08

The board of HarborOne Bancorp, Inc. (NASDAQ:HONE) has announced that it will pay a dividend on the 24th of July, with investors receiving $0.08 per share. This payment means that the dividend yield will be 3.0%, which is around the industry average.

See our latest analysis for HarborOne Bancorp

HarborOne Bancorp's Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

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.

Over the next year, EPS is forecast to expand by 39.5%. If recent patterns in the dividend continues, the future payout ratio in 12 months could be 78% which is a bit high but can definitely be sustainable.

historic-dividend

HarborOne Bancorp Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2020, the annual payment back then was $0.12, compared to the most recent full-year payment of $0.32. This means that it has been growing its distributions at 28% per annum 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.

Dividend Growth Could Be Constrained

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. HarborOne Bancorp has seen EPS rising for the last five years, at 14% per annum. The payout ratio is very much on the higher end, which could mean that the growth rate will slow down in the future, and that could flow through to the dividend as well.

Our Thoughts On HarborOne Bancorp's Dividend

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. While we generally think the level of distributions are a bit high, we wouldn't rule it out as becoming a good dividend payer in the future as its earnings are growing healthily. We would be a touch cautious of relying on this stock primarily for the dividend income.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 3 warning signs for HarborOne Bancorp 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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