Back to top

Image: Bigstock

Flushing Financial (FFIC) Hikes Dividend by 4.8%: Worth a Look?

Read MoreHide Full Article

Flushing Financial Corporation (FFIC - Free Report) has announced a hike in its quarterly dividend. The bank declared a dividend of 22 cents per share, representing a 4.8% sequential hike. The dividend will be paid out on Mar 25 to its shareholders of record as of Mar 11, 2022.

Prior to this, FFIC hiked the dividend 5% to 21 cents per share. We believe that such disbursements highlight FFIC’s operational strength and its commitment to enhance its shareholder wealth.

Considering the last day's closing price of $23.46 per share, Flushing Financial 's dividend yield currently stands at 3.8%. Not only is the yield attractive for income investors but it also represents a steady income stream.

Management noted, "The quarterly dividend increase to $0.22 per share reflects our record earnings in 2021 and momentum in 2022. The economic recovery, market disruption from recent mergers, and a strong loan pipeline should continue to drive growth in 2022. We remain committed to enhancing shareholder returns and executing on our strategic objectives.”

FFIC prioritizes profitably growing its balance sheet, returning dividends to its shareholders and opportunistically repurchasing shares. Flushing Financial repurchased 150,976 shares of common stock at an average price of $23.75 in the fourth quarter of 2021. Cash returned to its shareholders via dividends and share buybacks accounted for56% of the fourth-quarter earnings in 2021. This reflects Flushing Financial’s commitment to return value to its shareholders with its strong cash-generation capabilities.

Investors can look at the firm’s fundamentals and growth opportunities before making any investment decision.

Can Flushing Financial Maintain Its Payout?

Flushing Financial’s ability to sustain the hiked dividend depends on its earnings growth rate and the payout ratio. FFIC's current payout ratio of 29.8% is lower than its industry's average of 36.3%, indicating scope for its steady dividend increase. This means that FFIC is reinvesting more money to boost its business. By investing in business growth, FFIC will likely reap higher levels of capital gains for investors in the future.

FFIC also has an impressive surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing in one, the average beat being 20%.

Flushing Financial’s stock looks undervalued with respect to price-to-cash flow and price-to-earnings ratios. It has a price/earnings (F1) ratio of 9.73 and a price-to-cash flow ratio of 10.59 compared with the industry averages of 12.43 and 11.35, respectively.

FFIC’s return on equity of 13.57% compared with the industry average of 11.46% highlights its efforts in managing its shareholders’ capital better than its peers.

Shares of this currently Zacks Rank #4 (Sell) player have gained 0.7% in the past six months compared with the industry's growth of 8.1%.

Zacks Investment Research
Image Source: Zacks Investment Research

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks Undertaking Enhanced Capital-Deployment Actions

Over the past few months, several companies have rewarded their shareholders with dividend hikes. Some of these are Arbor Realty Trust, Inc. (ABR - Free Report) , Farmers National Banc Corp. (FMNB - Free Report) and Fidelity National Information Services Inc. (FIS - Free Report) .

Arbor Realty’s board of directors recently approved a 2.8% sequential hike in its quarterly cash dividend. The revised quarterly dividend now totals 37 cents per share compared with the previous figure of 36 cents. The amount will be paid out on Mar 18 to its shareholders of record as of Mar 4, 2022.

Prior to this hike, ABR had increased its dividend 2.9% (from 35 cents to 36 cents per share) last October.

Farmers National announced a hike in its quarterly dividend. The bank announced a dividend of 16 cents per share, representing a 14.3% sequential hike and a 45% year-over-year hike. The dividend will be paid out on Mar 31 to its shareholders of record as of Mar 11, 2022.

The recent dividend hike marks the 7th consecutive quarter of an increase by Farmers National. Prior to this, FMNB hiked the dividend 27% to 14 cents per share.

Consistent with its updated capital-management strategy announced in November 2021, Fidelity hiked its quarterly common stock dividend 21% from the prior-quarter’s payout to 47 cents per share in January this year. The new dividend will be paid out on Mar 29 to its shareholders of record as of Mar 25, 2022.

Since March 2012, Fidelity National has raised its dividend eight times. Its dividend was last hiked in February 2021 by 11% to 39 cents per share.