Hanmi Financial Corporation (NASDAQ: HAFC) has passed our checks and is about to pay a dividend of US $ 0.20


Regular readers will know we love our dividends at Simply Wall St, which is why it’s exciting to see Hanmi Financial Corporation (NASDAQ: HAFC) is set to trade ex-dividend within the next two days. The ex-dividend date is a business day before a company’s registration date, which is the date the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to know, as any purchase of shares made after this date may mean a late settlement which does not appear on the registration date. So you can buy Hanmi Financial shares before November 5 in order to receive the dividend, which the company will pay out on November 24.

The company’s next dividend payment will be US $ 0.20 per share. Last year, in total, the company distributed US $ 0.40 to shareholders. Calculating the value of last year’s payouts shows Hanmi Financial has a 1.7% return on the current stock price of $ 23.02. Dividends are an important source of income for many shareholders, but the health of the business is critical to sustaining those dividends. That is why we should always check whether dividend payments seem sustainable and whether the business is growing.

Check out our latest analysis for Hanmi Financial

Dividends are generally paid out of company profits. If a company pays more dividends than it made a profit, then the dividend could be unsustainable. Hanmi Financial pays only 16% of its profit after tax, which is comfortably low and leaves a lot of leeway in the event of adverse events.

Companies that pay less dividends than they earn profits generally have more sustainable dividends. The lower the payout ratio, the more leeway the company has before being forced to reduce the dividend.

Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.

NasdaqGS: HaFC Historical Dividend November 2, 2021

Have profits and dividends increased?

Companies with strong growth prospects generally make the best dividend payers because dividends are easier to grow when earnings per share improve. If profits fall enough, the company could be forced to cut its dividend. With that in mind, we are encouraged by the steady growth of Hanmi Financial, with earnings per share rising 9.2% on average over the past five years.

Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. Hanmi Financial generated an average annual increase of 4.6% per annum in its dividend, based on dividend payments over the past eight years. We are happy to see dividends growing alongside earnings over multiple years, which may be a sign that the company intends to share the growth with its shareholders.

To summarize

From a dividend perspective, should investors buy or avoid Hanmi Financial? Hanmi Financial has seen its earnings per share slowly increase in recent years, and the company is reinvesting more than half of its earnings back into the business, which generally bodes well for its future prospects. Hanmi Financial ticks a lot of boxes for us from a dividend perspective, and we believe these characteristics should mark the company as deserving more attention.

On that note, you’ll want to research the risks Hanmi Financial faces. Every business has risks, and we have spotted 2 warning signs for Hanmi Financial (1 of which cannot be ignored!) that you should know.

If you are in the dividend-paying stock market, we recommend that you check out our list of the highest dividend-paying stocks with a yield above 2% and a future dividend.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

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