It looks like Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK) is about to go ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Therefore, if you purchase Northfield Bancorp (Staten Island NY)'s shares on or after the 7th of August, you won't be eligible to receive the dividend, when it is paid on the 21st of August.

The company's next dividend payment will be US$0.13 per share. Last year, in total, the company distributed US$0.52 to shareholders. Based on the last year's worth of payments, Northfield Bancorp (Staten Island NY) stock has a trailing yield of around 4.3% on the current share price of US$12.05. If you buy this business for its dividend, you should have an idea of whether Northfield Bancorp (Staten Island NY)'s dividend is reliable and sustainable. As a result, readers should always check whether Northfield Bancorp (Staten Island NY) has been able to grow its dividends, or if the dividend might be cut.

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

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Its dividend payout ratio is 77% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're discomforted by Northfield Bancorp (Staten Island NY)'s 5.3% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Northfield Bancorp (Staten Island NY) has lifted its dividend by approximately 8.0% a year on average. The only way to pay higher dividends when earnings are shrinking is either to pay out a larger percentage of profits, spend cash from the balance sheet, or borrow the money. Northfield Bancorp (Staten Island NY) is already paying out 77% of its profits, and with shrinking earnings we think it's unlikely that this dividend will grow quickly in the future.