Highlands Bancorp, Inc. : HSBK-US: Dividend Analysis : November 11th, 2016 (record date) : By the numbers : January 10, 2017

Our analysis is based on comparing Highlands Bancorp, Inc. with the following peers – German American Bancorp, Inc., WesBanco, Inc., Enterprise Bancorp, Inc. and FS Bancorp Lagrange Indiana (GABC-US, WSBC-US, EBTC-US and FXLG-US).

Highlands Bancorp, Inc.’s dividend yield is 0.80 percent and its dividend payout is 8.86 percent. This compares to a peer average dividend yield of 1.44 percent and a payout level of 31.42 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 50 out of a possible score of 100 is only about average.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to September 30, 2016), HSBK-US paid a low quality dividend, which represents a yield of 0.70% at the current price.
  • Only one dividend was paid over the last five years — it was also of low quality.
  • The ending cash balance, with a dividend coverage of 68.44x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to September 30, 2016), HSBK-US paid a low quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 13.56x), investing cash flow (coverage of -651.10x), issuance cash flow (coverage of 573.99x) and twelve-month prior cash (coverage of 0x), for a total dividend coverage of 1x.

HSBK-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.99x). Thus, the total coverage including share buybacks is 70.42x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2010-12-31 2011-12-31 2013-12-31 2014-12-31 2015-12-31 Latest
Dividend Yield (%) 0 0 0 N/A 0.51 0.8
Dividend Payout (%) 0 0 0 N/A 5.13 8.86

A complete list of metrics and analysis is available on the company page.

Company Profile

Highlands Bancorp, Inc. operates as a bank holding company for Highlands State Bank, which engages in the business of providing banking products and related financial services. The company offers various deposit products, including checking accounts, time deposits, money market accounts, savings accounts, and certificates of deposits; and loan products, such as commercial, consumer, mortgage, construction, and personal loans, as well as automobile, bridge, home equity, and home improvement loans. It also provides loans for equipment and working capital needs, as well as for financing of commercial real estate; and one-to-four-family residential real estate loans. The company also offers electronic banking services, including Internet banking and electronic bill payment services, as well as MasterCard check cards, ATM cards, and automatic and ACH transfers. Highlands Bancorp was founded in 2005 and is headquartered in Vernon, NJ.

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