Last update on 2024-06-27

Flushing Financial (FFIC) - Dividend Analysis (Final Score: 7/8)

Flushing Financial (FFIC) Dividend Analysis: Evaluating performance and stability with an impressive 7/8 score. Explore FFIC's commitment to growing income.

Short Analysis - Dividend Score: 7

We're running Flushing Financial (FFIC) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

Flushing Financial (FFIC) has been analyzed based on an 8-criteria scoring system to evaluate its dividend policy. FFIC achieved a high dividend score of 7, indicating strong performance. The company offers a dividend yield of 5.34% in 2023, significantly higher than the industry average of 2.76%. Over the past 20 years, dividends have grown from $0.28 to $0.88 per share, with average annual payout ratios under the 65% benchmark, showing steady and sustainable growth. Dividends are typically well-covered by earnings and cash flow, although there were some fluctuations. FFIC has paid dividends for over 25 years, confirming consistent returns to shareholders. The company's history of reliable stock repurchases further adds to investor confidence. However, a high payout ratio in 2023 must be monitored for sustainability.

Insights for Value Investors Seeking Stable Income

Based on the analysis, Flushing Financial (FFIC) appears to be a strong contender for investors seeking steady dividend income. The company’s long-term commitment to dividend payments and growth, coupled with strong yield and responsible payout ratios, make it worth considering for income-focused portfolios. Nonetheless, investors should keep an eye on the recent high payout ratio to ensure future sustainable growth. Overall, FFIC represents a resilient option with proven value returns, particularly fitting those desiring regular income from their investments.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Dividend Yield Higher than the Industry Average?

Dividend yield measures the return on investment from dividends alone relative to the stock price, indicating income potential for investors.

Flushing Financial (FFIC) boasts a dividend yield of 5.3398% in 2023, notably higher than the industry average of 2.76%. Analyzing the past 20 years, FFIC's yield has significantly increased from 1.5317% in 2003, peaking at 5.0481% in 2020 and reaching its highest at 5.3398% in 2023. This trend suggests FFIC has committed to rewarding shareholders with a growing income stream, making it an attractive option for income-focused investors. However, investors must evaluate if such high yields are sustainable or driven by stock price declines as the latest stock price closed at $16.48 in 2023, indicating some volatility. Combining a rising dividend per share from $0.28 in 2003 to $0.88 in 2023, it indicates a stable and growing return for shareholders, albeit with the need for cautious optimism due to potential market fluctuations.

Average annual Growth Rate higher than 5% in the last 20 years?

Explain the criterion for Flushing Financial (FFIC) and why it is important to consider

The Dividend Growth Rate criterion examines whether the dividend growth rate has been higher than 5% annually over the last 20 years, signaling a company's commitment to consistently increasing shareholder returns, reflecting growth and stability.

Average annual Payout Ratio lower than 65% in the last 20 years?

Explains how the average payout ratio over a 20-year period is crucial for dividend sustainability and long-term financial health of a company.

The average payout ratio for Flushing Financial (FFIC) over the past 20 years is 44.16%, which is significantly below the 65% threshold. This indicates that the company is likely managing its profits well and not overly distributing its earnings as dividends. With ratios ranging from 22.95% in 2003 to a peak of 91.87% in 2023, FFIC generally shows prudence in maintaining a payout ratio that allows for reinvestment into the business and cushions in less profitable years. However, the elevated ratio in recent years, particularly in 2023, warrants close monitoring to ensure this does not signal potential future financial strain.

Dividends Well Covered by Earnings?

Dividends are well covered by earnings.

Analyzing the data from 2003 to 2023, Flushing Financial (FFIC) generally maintains a respectable ratio of earnings to dividends per share, denoted by the covered ratio. This ratio represents the ability of earnings to cover dividend payments. A higher ratio implies better coverage and tends to reflect financial stability. For FFIC, the coverage ratio has fluctuated considerably over the years. Notably, the lowest coverage was observed in 2023 (0.9187) and the highest in 2003 (0.2295). Over the two decades, FFIC's dividend cover ratio mostly remained above the 0.4 mark, indicating relatively healthy earnings supporting dividend payments, as ratios under 1.0 usually suggest vulnerability. Coverage above 1.0, such as in 2007, 2008, and others, indicates sound financial stability. These fluctuations resemble market and operational performances. Despite a lower ratio in 2023 suggesting a decline in affordability to cover dividend payments by earnings, a relatively stable previous history suggests underlying strength.

Dividends Well Covered by Cash Flow?

The sustainability of dividends often depends on how well they are covered by the company's free cash flow. Ideally, a company should have a significant portion of its free cash flow exceeding the dividend payments to ensure financial flexibility and long-term viability of dividends.

Analyzing the coverage of dividends by free cash flow for Flushing Financial (FFIC) over the period from 2003 to 2023 reveals some interesting trends. Initially, the company's dividend coverage was relatively low, with ratios such as 0.1823 in 2003 and gradually increasing to 0.4229 by 2007. During the financial crisis in 2008-2009, the coverage ratio spiked to 0.5916, likely indicating cautious management of cash flow during economic uncertainty. After a period of strong coverage ratios, we see a dip again in the early 2010s, going as low as 0.2121 in 2013. Notably, free cash flow coverage improved significantly in 2014 and 2015, reaching up to 0.5534 and 0.5509 respectively. However, a decline is observed from 2017 onwards, with the ratio dropping to as low as 0.3123 in 2021. Nevertheless, 2023 marks a significant improvement with the coverage ratio almost hitting singularity at 0.9025. This indicates that, while there have been fluctuations, the trend in recent years shows substantial improvement, suggesting that Flushing Financial is becoming more effective in managing its free cash flow to cover its dividend payouts. Overall, considering the latest data, this trend is good for the criterion, showing the company's resilience and prudent financial planning as it ensures a strong free cash flow-to-dividend coverage ratio.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends over the past 20 years is essential for income-seeking investors.

Flushing Financial (FFIC) has generally demonstrated stability in its dividend payouts over the last two decades. The recorded dividend per share has shown an upward trend from $0.28 in 2003 to $0.88 in 2023. Yet, closely examining reveals that the year 2013 experienced a significant 24% drop in dividends, from $0.52 per share to $0.4 per share. Despite this fluctuation, the overall trend has been upward post-2013, making the drop an outlier. This trend is beneficial given the observance of an increase in dividends over the long term, albeit with a notable dip.

Dividends Paid for Over 25 Years?

Describe the importance of whether Flushing Financial (FFIC) has paid dividends for over 25 years.

Based on the provided data, Flushing Financial (FFIC) has consecutively paid dividends for over 25 years, starting in 1998. This trend is considered positive, as it signals financial stability and commitment to returning value to shareholders. The consistent dividend payment also suggests reliable cash flow generation by the company. Additionally, the dividend per share has shown growth from $0.1007 in 1998 to $0.88 in 2023, indicating an upward trend which is favorable for investors seeking income generation and long-term growth.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Flushing Financial (FFIC) and why it is important to consider

Reliable and consistent stock repurchases over a prolonged period of time can indicate a company's commitment to returning value to shareholders. This can also serve as a confidence signal, showcasing the management's belief in the company's future prospects. Evaluating the history of stock repurchases can help investors determine the reliability of the company in delivering shareholder value.