First Northwest Bancorp (NASDAQ:FNWB) Is Due To Pay A Dividend Of $0.07

The board of First Northwest Bancorp (NASDAQ:FNWB) has announced that it will pay a dividend of $0.07 per share on the 24th of February. The dividend yield is 1.8% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for First Northwest Bancorp

First Northwest Bancorp's Earnings Will Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

First Northwest Bancorp has a short history of paying out dividends, with its current track record at only 4 years. Based on its last earnings report however, the payout ratio is at a comfortable 16%, meaning that First Northwest Bancorp may be able to sustain this dividend for future years if it continues on this earnings trend.

Looking forward, EPS is forecast to rise by 11.9% over the next 3 years. Analysts forecast the future payout ratio could be 15% over the same time horizon, which is a number we think the company can maintain.


First Northwest Bancorp Doesn't Have A Long Payment History

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2019, the annual payment back then was $0.12, compared to the most recent full-year payment of $0.28. This works out to be a compound annual growth rate (CAGR) of approximately 24% a year over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that First Northwest Bancorp has grown earnings per share at 30% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like First Northwest Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think First Northwest Bancorp might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for First Northwest Bancorp that you should be aware of before investing. 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.

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