Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Bank of Hawaii Corporation (NYSE:BOH) is about to trade ex-dividend in the next four days. You can purchase shares before the 25th of February in order to receive the dividend, which the company will pay on the 12th of March.
Bank of Hawaii's next dividend payment will be US$0.67 per share. Last year, in total, the company distributed US$2.68 to shareholders. Calculating the last year's worth of payments shows that Bank of Hawaii has a trailing yield of 3.0% on the current share price of $89.1. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Bank of Hawaii
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Bank of Hawaii paid out 69% of its earnings to investors last year, a normal payout level for most businesses.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's not encouraging to see that Bank of Hawaii's earnings are effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Bank of Hawaii has lifted its dividend by approximately 4.1% a year on average.
Has Bank of Hawaii got what it takes to maintain its dividend payments? Bank of Hawaii has been struggling to generate growth while also paying out more than half of its earnings to shareholders as dividends. We're unconvinced on the company's merits, and think there might be better opportunities out there.
Ever wonder what the future holds for Bank of Hawaii? See what the six analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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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