Heartland Financial USA (NASDAQ:HTLF) Has Announced That It Will Be Increasing Its Dividend To $0.30
Heartland Financial USA, Inc. (NASDAQ:HTLF) will increase its dividend from last year’s comparable payment on the 26th of May to $0.30. The payment will take the dividend yield to 3.3%, which is in line with the average for the industry.
See our latest analysis for Heartland Financial USA
Heartland Financial USA’s Earnings Will Easily Cover The Distributions
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
Heartland Financial USA has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn’t a guarantee for the future, Heartland Financial USA’s latest earnings report puts its payout ratio at 23%, showing that the company can pay out its dividends comfortably.
Over the next 3 years, EPS is forecast to expand by 8.7%. The future payout ratio could be 25% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Dividend Volatility
The company has a long dividend track record, but it doesn’t look great with cuts in the past. The annual payment during the last 10 years was $0.40 in 2013, and the most recent fiscal year payment was $1.20. This means that it has been growing its distributions at 12% per annum over that time. Heartland Financial USA has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it’s even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It’s encouraging to see that Heartland Financial USA has been growing its earnings per share at 12% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Heartland Financial USA’s prospects of growing its dividend payments in the future.
We Really Like Heartland Financial USA’s Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
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 2 warning signs for Heartland Financial USA 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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