Northfield Bancorp, Inc. (Staten Island, NY)'s (NASDAQ:NFBK) investors are due to receive a payment of $0.13 per share on 20th of November. This means the annual payment is 4.5% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Northfield Bancorp (Staten Island NY)

Northfield Bancorp (Staten Island NY)'s Earnings Will Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Having distributed dividends for at least 10 years, Northfield Bancorp (Staten Island NY) has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Northfield Bancorp (Staten Island NY)'s payout ratio of 81% is a good sign as this means that earnings decently cover dividends.

The next 3 years are set to see EPS grow by 145.6%. For the same time horizon, analysts estimate that the future payout ratio could be 42% which would be quite comfortable going to take the dividend forward.

Northfield Bancorp (Staten Island NY) Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.24 in 2014 to the most recent total annual payment of $0.52. This works out to be a compound annual growth rate (CAGR) of approximately 8.0% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

Dividend Growth May Be Hard To Come By

Investors could be attracted to the stock based on the quality of its payment history. However, initial appearances might be deceiving. Northfield Bancorp (Staten Island NY) has seen earnings per share falling at 6.0% per year over the last five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.

In Summary

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. Although they have been consistent in the past, we think the payments are a little high to be sustained. We would be a touch cautious of relying on this stock primarily for the dividend income.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Given that earnings are not growing, the dividend does not look nearly so attractive. Very few businesses see earnings consistently shrink year after year in perpetuity though, and so it might be worth seeing what the 3 analysts we track are forecasting for the future. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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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.