Bank of Hawaii Corporation (NYSE:BOH) Passed Our Checks, And It's About To Pay A US$0.67 Dividend
It looks like Bank of Hawaii Corporation (NYSE:BOH) is about to go ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 27th of February will not receive the dividend, which will be paid on the 13th of March.
Bank of Hawaii's next dividend payment will be US$0.67 per share, on the back of last year when the company paid a total of 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 $89.47. If you buy this business for its dividend, you should have an idea of whether Bank of Hawaii's dividend is reliable and sustainable. So we need to investigate whether Bank of Hawaii can afford its dividend, and if the dividend could grow.
See 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. That's why it's good to see Bank of Hawaii paying out a modest 46% of its earnings.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Bank of Hawaii, with earnings per share up 8.5% on average over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Bank of Hawaii has delivered an average of 4.1% per year annual increase in its dividend, based on the past ten years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
To Sum It Up
Is Bank of Hawaii worth buying for its dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. In summary, Bank of Hawaii appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
Curious what other investors think of Bank of Hawaii? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
