Capitol Federal Financial (NASDAQ:CFFN) Has Announced A Dividend Of $0.085

Capitol Federal Financial, Inc. (NASDAQ:CFFN) will pay a dividend of $0.085 on the 20th of February. This means the annual payment is 4.7% of the current stock price, which is above the average for the industry.

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Capitol Federal Financial's Dividend Forecasted To Be Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Capitol Federal Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 61%, which means that Capitol Federal Financial would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to rise by 14.6% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 58%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Capitol Federal Financial

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The dividend has gone from an annual total of $0.85 in 2016 to the most recent total annual payment of $0.34. The dividend has shrunk at around 8.8% a year during that period. A company that decreases its dividend over time generally isn't what we are looking for.

Capitol Federal Financial Could Grow Its Dividend

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. It's encouraging to see that Capitol Federal Financial has been growing its earnings per share at 5.2% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Our Thoughts On Capitol Federal Financial's Dividend

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Capitol Federal Financial that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.