Logansport Financial Offers 16.7% Dividend Boost (LOGN)
By: Ned Piplovic,
Logansport Financial Corporation (OTCBB:LOGN) rewarded its shareholders with a 16.7% quarterly dividend hike, offers a long-term growth dividend strategy and currently pays a 3.4% dividend yield.
The company’s current yield outperforms the average yield of its industry peers by a wide margin. In addition to raising dividends over an extended period, the company also has a long-term rising share price trend, despite the price volatility in the short term.
The company’s next ex-dividend date is set for March 12, 2018, and the pay date follows approximately three weeks later, on April 2, 2018.
Logansport Financial Corporation (OTCBB:LOGN)
Based in Logansport, Indiana, and founded in 1925, Logansport Financial Corporation operates as the holding company for Logansport Savings Bank, which provides a range of banking and financial services to individual and corporate customers primarily in Cass County, Indiana. In addition to customary banking services, such as checking accounts, savings accounts, health savings accounts, certificates of deposit and individual retirement accounts, the bank offers a variety of personal and commercial loans.
The company increased its quarterly distribution 16.7% from the $0.30 in the last period to the current $0.35 quarterly distribution. This current distribution is equivalent to a $1.40 annualized amount and a 3.4% forward yield, which matches the company’s average yield over the past five years. The company’s current 3.4% yield trails the 5.1% average yield of the entire Financial sector by more than 30%. However, Logansport Financial’s current yield is more than double the 1.65 simple average yield of all the companies in the Regional Midwest Banks segment. Even excluding the companies that do not distribute dividends raises the average segment yield only slightly to 2.2% and Logansport Financial Corporation’s yield is still 54% ahead.
The company managed to avoid any reductions to its annual dividend payout since it first started distributing dividends in 1995. Over the past two decades, the company hiked its annual dividend more than half the time and grew its annual dividend payout at an average rate of 6.2% per year, which enhanced the total annual payout amount by more than 230% over that period. Since 2012, the company managed to grow its annual payout at an even faster pace of 15.2% per year, and it enhanced its total annual payout by more than 130% over the past six years of consecutive annual dividend hikes.
The company’s share price experienced some volatility in the past 12 months, resulting in a small overall loss to the shareholders. Following a 10% drop and a 14% recovery in the span of three weeks at the onset of the current trailing 12-month period, the share price reached its 52-week high of $43.95 on March 20, 2017. After the March peak, the share price fell almost 15% to its 52-week low of $38.50 on October 23, 2017. Since bottoming out in October 2017, the share price rose and briefly exceeded its $42.75 price from February 22, 2017, before getting caught up in the market selloff at the and of January 2018. The share price closed on February 21, 2018, at $41.25, which was 6% below the 52-week high from March 2017, 3.5% lower than it was one year earlier, 7.7% higher the 52-week low from September 2017 and 83% higher than it was five years ago.
Even with the general uptrend since its 52-week low in September 2017 and a decent dividend income, the shareholders ended the year with a 4.5% total loss. However, the volatility that the share price experienced in the last 12 months was mostly absent in previous years. Therefore, over the past three years, the company rewarded its shareholders with a 60% total return, as well as total return of nearly 120% over the past five years.
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