First Foundation Inc. (NASDAQ:FFWM) Passed Our Checks, And It's About To Pay A US$0.07 Dividend
It looks like First Foundation Inc. (NASDAQ:FFWM) is about to go ex-dividend in the next 4 days. Investors can purchase shares before the 4th of March in order to be eligible for this dividend, which will be paid on the 16th of March.
First Foundation's next dividend payment will be US$0.07 per share, on the back of last year when the company paid a total of US$0.28 to shareholders. Based on the last year's worth of payments, First Foundation stock has a trailing yield of around 1.9% on the current share price of $14.8. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether First Foundation has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for First Foundation
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. First Foundation paid out just 16% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
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?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, First Foundation's earnings per share have been growing at 18% a year for the past five years.
Given that First Foundation has only been paying a dividend for a year, there's not much of a past history to draw insight from.
Final Takeaway
Has First Foundation got what it takes to maintain its dividend payments? Companies like First Foundation that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, First Foundation looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
Ever wonder what the future holds for First Foundation? See what the four analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
If you're in the market for dividend stocks, we recommend checking our list of top 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.
